Zero-Rated Healthcare
Healthcare services are zero-rated when provided by a qualifying provider:
- The provider must be a hospital, clinic, or medical professional licensed by the relevant UAE health authority.
- Preventive, basic, and enhanced healthcare services are zero-rated.
- Medicines and medical equipment specified by the Cabinet are zero-rated when supplied to qualifying providers.
Cosmetic procedures are generally standard-rated (5%) unless medically necessary.
Zero-Rated Education
Education services are zero-rated when provided by a qualifying institution:
- Nurseries, preschools, and K-12 schools licensed by the relevant UAE education authority.
- Higher education institutions owned or funded by the federal or local government.
- Tuition fees are zero-rated.
- Goods and services directly related to the education are zero-rated (books, uniforms, electronic devices provided as part of the curriculum).
Private tutoring and training not provided by a qualifying institution is standard-rated at 5%.
Zero-Rated New Residential Buildings
The first supply of a new residential building within 3 years of completion is zero-rated:
- The developer charges 0% VAT on the first sale or rent.
- The developer can recover all input tax on construction costs.
- After the first supply, subsequent supplies are exempt.
The 3-Year Rule
- If the first supply occurs within 3 years of completion: zero-rated.
- If the first supply occurs after 3 years: the supply is exempt (no zero-rating, no input tax recovery).
Commercial Real Estate
Commercial real estate is standard-rated at 5% — the owner charges VAT and can recover input tax. This includes offices, retail spaces, and hotels.
Bare Land
Bare land is exempt — no VAT charged, no input tax recovery.
Worked Example
A developer completes a residential building in 2025 and sells the first unit in 2026 (within 3 years). The sale is zero-rated — the developer charges 0% and recovers all input tax on construction. If the buyer later rents the unit, the rental is exempt.