Education — Zero-Rated with Conditions

Education VAT Treatment

General Rule: Zero-Rated

Education services are zero-rated (0%) when provided by a qualifying institution:

• No VAT is charged on tuition fees.
• The institution can recover input tax on related expenses.

Qualifying Institutions

1. Nurseries and preschools licensed by the relevant UAE education authority.
2. K-12 schools (private and government) licensed by the education authority.
3. Higher education institutions owned or funded by the federal or local government.
4. Vocational training provided by qualifying institutions.

What is Zero-Rated?

• Tuition fees: The core education service.
• Goods and services directly related to education: Books, uniforms, electronic devices provided as part of the curriculum.
• Accommodation provided to students by the institution (in qualifying cases).
• Food provided as part of the educational program.

What is NOT Zero-Rated?

• Private tutoring and extra-curricular coaching not provided by a qualifying institution — standard-rated at 5%.
• Training courses provided by private companies — standard-rated at 5%.
• Goods sold by the institution that are not directly related to education (e.g., school uniform sold separately, merchandise) — standard-rated at 5%.
• Transportation provided by the school — standard-rated at 5%.

Conditions

The zero-rating applies only if:

1. The institution is a qualifying institution (licensed/government-funded).
2. The service is an education service (tuition, related goods/services).
3. The service is provided to enrolled students.

Worked Example

A Dubai private school (licensed by KHDA) charges AED 50,000 annual tuition — zero-rated. The school also sells uniforms for AED 1,000 — standard-rated at 5% (AED 50 VAT). The school provides bus transport for AED 5,000 — standard-rated at 5% (AED 250 VAT). The school recovers input tax on all expenses (building, teachers, equipment) because it makes zero-rated supplies.