Thursday 7 December 2017

VAT in the UAE starts January 01, 2018: What you need to know

The New Year is rapidly approaching – and so is the new VAT. Up until now it’s been a bit unclear about what will be taxed, that is until today.
The Federal Tax Authority has just released the list of everything that will be subject to the 5 percent tax.
It has also released details of what will be zero rated (meaning you, as the consumer won’t have to pay any tax) and what will be completely exempt from the charge.
Read below for the full list.
Food and Beverages
Food and beverages: 5 percent.
Transport
Domestic passenger transportation (including flights within UAE): Exempt
International transportation of passengers and goods (including intra-GCC): 0 percent.
Supply of a means of transport (air, sea and land) for the commercial transportation of goods and passengers (over 10 people): 0 percent.
Supply of goods and services relating to these means of transport and to the transportation of goods and passengers: 0 percent.
Healthcare
Preventive healthcare services including vaccinations: 0 percent
Healthcare services aimed at treatment of humans including medical services and dental services: 0 percent.
Other healthcare services that are not for treatment and are not preventive (elective, cosmetic, etc): 5 percent
Medicines and medical equipment as listed in Cabinet Decision: 0 percent
Medicines and medical equipment not listed in Cabinet Decision: 5 percent
Other medical supplies: 5 percent
Education
Private and public school education (excluding higher education) and related goods and services provided by education institution: 0 percent
Higher education provided by institution owned by government or 50 percent funded by government, and related goods and services: 0 percent
Education provided by private higher educational institutions, and related goods and services: 5 percent
Nursery education and pre-school education: 0 percent
School uniforms: 5 percent
Stationery: 5 percent
Electronic equipment (tablets, laptops, etc): 5 percent
Renting of school grounds for events: 5 percent
After-school activities for extra fee: 5 percent
After-school activities supplied by teachers and not for extra charge: 0 percent
School trips where purpose is educational and within curriculum: 0 percent
School trips for recreation or not within curriculum: 5 percent
Oil and gas
Crude oil and natural gas: 0 percent
Other oil and gas products, including petrol at the pump: 5 percent
Real Estate
Sale and rent of commercial buildings (not residential buildings): 5 percent
First sale/rent of residential building after completion of construction or conversion: 0 percent
First sale of charitable building: 0 percent
Sale/rent of residential buildings subsequent to first supply: Exempt
Hotels, motels and serviced accommodation: 5 percent
Bare land: Exempt
Land (not bare land): 5 percent
UAE citizen building own home: 5 percent (recoverable)
Financial Services
Margin based products (products not having an explicit fee, commission, rebate, discount or similar): Exempt
Products with an explicit fee, commission, rebate, discount or similar: 5 percent
Interest on forms of lending (including loans, credit cards, finance leasing): Exempt
Issue, allotment or transfer of an equity or debt security: Exempt
Gold, Silver and Platinum
Over 99 percent pure and tradable in global markets: 0 percent
Less than 99 percent pure: 5 percent
Jewellery: 5 percent
Insurance and reinsurance
Insurance and reinsurance (including health, motor, property, etc): 5 percent
Life insurance and life reinsurance: Exempt
Telecommunications
Wired and wireless telecommunications and electronic services: 5 percent
Others
Export of goods and services to outside the GCC implementing states: 0 percent
Activities undertaken by employees in the course of their employment, including salaries: Considered outside the VAT system
Supplies between members of a single tax group: Considered outside the VAT system
Any supplies of services or goods not mentioned above (includes any items sold in the UAE or service provided): 5 percent
Second hand goods (eg used cars sold by retailers), antiques and collectors’ items: 5 percent.

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