Here is everything that will be subject to VAT (and everything that won’t be)

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From January 1, you’ll pay a 5 per cent tax on these goods and services.

We all know value added tax (VAT) is coming, and while we’ve had a vague idea of what will and won’t be taxed, we haven’t known the exact details. Until now.

The Federal Tax Authority has just released a list of everything that will be subject to VAT, as well as everything that will be zero-rated (which means you, the consumer, won’t have to pay any tax on those items or services). Other things will be completely exempt from VAT.

For more information on the background of VAT and how it all works you can click here, but if you’re already up to speed, read on:

EDUCATION

Private and public school education (excluding higher education) and related goods and services provided by education institution: 0%

Higher education provided by institution owned by government or 50% funded by government, and related goods and services: 0%

Education provided by private higher educational institutions, and related goods and services: 5%

Nursery education and pre-school education: 0%

School uniforms: 5%

Stationery: 5%

Electronic equipment (tablets, laptops, etc): 5%

Renting of school grounds for events: 5%

After-school activities for extra fee: 5%

After-school activities supplied by teachers and not for extra charge: 0%

School trips where purpose is educational and within curriculum: 0%

School trips for recreation or not within curriculum: 5%

HEALTHCARE

Preventive healthcare services including vaccinations: 0%

Healthcare services aimed at treatment of humans including medical services and dental services: 0%

Other healthcare services that are not for treatment and are not preventive (elective, cosmetic, etc): 5%

Medicines and medical equipment as listed in Cabinet Decision: 0%

Medicines and medical equipment not listed in Cabinet Decision: 5%

Other medical supplies: 5%

OIL AND GAS

Crude oil and natural gas: 0%

Other oil and gas products, including petrol at the pump: 5%

TRANSPORT

Domestic passenger transportation (including flights within UAE): Exempt

International transportation of passengers and goods (including intra-GCC): 0%

Supply of a means of transport (air, sea and land) for the commercial transportation of goods and passengers (over 10 people): 0%

Supply of goods and services relating to these means of transport and to the transportation of goods and passengers (it’s also been confirmed that Salik is included in this, and won’t be taxed): 0%

REAL ESTATE

Sale and rent of commercial buildings (not residential buildings): 5%

First sale/rent of residential building after completion of construction or conversion: 0%

First sale of charitable building: 0%

Sale/rent of residential buildings subsequent to first supply: Exempt

Hotels, motels and serviced accommodation: 5%

Bare land: Exempt

Land (not bare land): 5%

UAE citizen building own home: 5% (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%

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

≥99% pure and tradable in global markets: 0%

<99% pure: 5%

Jewellery: 5%

INSURANCE AND REINSURANCE

Insurance and reinsurance (including health, motor, property, etc): 5%

Life insurance and life reinsurance: Exempt

FOOD AND BEVERAGES

Food and beverages: 5%

ALSO READ: Heads up: It turns out ALL food is going to be taxed under VAT

TELECOMMUNICATIONS

Wired and wireless telecommunications and electronic services: 5%

OTHER

Export of goods and services to outside the GCC implementing states: 0%

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%

Second hand goods (eg used cars sold by retailers), antiques and collectors’ items: 5%

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