Zero-Rated Supplies Under UAE VAT

Under the UAE VAT law, zero-rated supplies are taxable at 0% VAT, meaning businesses must charge 0% VAT to customers but can still claim input VAT on related expenses. These supplies are different from exempt supplies, where no VAT is charged and input VAT cannot be claimed.

Categories of Zero-Rated Supplies

1. Export of Goods & Services

 Exports of goods and services outside the UAE & GCC VAT-implementing states are zero-rated.

 Businesses must maintain proper export documentation to prove eligibility.

2. International Transportation

 International transportation of passengers and goods (e.g., airlines, cargo shipping).

 Related services such as airport handling and maintenance of international transport vehicles.

3. Certain Education Services

 Zero-rated for nurseries, preschools, primary, and secondary education in UAE.

 Includes supply of books and learning materials directly related to education.

 Higher education is zero-rated only if funded by the government; otherwise, it is taxable.

4. Certain Healthcare Services & Medical Goods

 Preventive and primary healthcare services are zero-rated.

 Includes medicines and medical equipment approved by UAE’s Ministry of Health.

 Cosmetic treatments and non-essential medical procedures are standard-rated (5%).

5. First Sale of Residential Property

 The first supply of newly constructed residential buildings within three years of completion is zero-rated.

 Applies to sales or leases to individuals.

 Subsequent sales or rentals are exempt from VAT.

6. Supply of Certain Investment-Grade Gold, Silver & Platinum

 Precious metals with a purity of 99% or above, used for investment purposes, are zero-rated.

 Jewelry and other non-investment metals are subject to 5% VAT.