UAE VAT Law

From 1st January, 2018, United Arab Emirates is all set to impose 5% VAT on goods and services.

By Julia | November 10th, 2017 | VAT

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A List of Goods and Services That Fall Under The UAE VAT Law

From 1st January, 2018, United Arab Emirates is all set to impose 5% VAT on goods and services. As we all know that VAT is a kind of general consumption tax based on the value added at each point of sales and production, let’s take a close look at the types of goods and services that shall come under the UAE VAT Law.

In UAE, there are mainly two types of supplies that fall under the UAE VAT system, namely Exempted Supplies and Taxable Supplies. However, Taxable Supplies has been further categorized to standard/full rated and zero rated supplies. Exempt Supplies are the types of supplies which won’t be affected by the implementation of VAT in UAE. These include:

  • Residential Property Leases
  • Bare Land
  • Transportation such as Bus, Metro, Taxi
  • Residential Property – Second Sale onwards

Taxable Supplies or Standard Rates are supplies on which the UAE VAT rate of 5% will be implemented.  Goods and services that shall come under this category include:

  • Retail Purchases
  • Commercial Property (Leases and Sales)
  • Car Rentals and Sales
  • Restaurants and Hotels
  • Repair and Maintenance service

Zero Rated is yet another category on which VAT applied is 0%. However, input tax can be deducted in zero rated supplies. These include:

  • Education
  • Healthcare
  • Medicines
  • Residential – first sale
  • International Transport
  • Investment in silver, platinum, gold
  • Exports.

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