Cosmetic procedures (not medically necessary): Standard-rated at 5%.
Over-the-counter medicines sold by pharmacies to walk-in customers: Standard-rated at 5%.
Non-medical services provided by healthcare institutions (e.g., cafeteria food, parking): Standard-rated at 5%.
Wellness and spa services (not provided by qualifying healthcare providers): Standard-rated at 5%.
Conditions
The zero-rating applies only if:
The provider is a qualifying provider (licensed by the health authority).
The service is a healthcare service (preventive, basic, or enhanced).
The service is for the purpose of treatment, prevention, or diagnosis of illness.
Worked Example
A Dubai hospital (licensed by DHA) provides consultation (AED 500 — zero-rated), surgery (AED 20,000 — zero-rated), and medication (AED 500 — zero-rated). The hospital also operates a cafeteria (AED 50 — standard-rated at 5%) and a cosmetic surgery clinic (AED 10,000 — standard-rated at 5% if cosmetic). The hospital recovers input tax on all medical expenses because it makes zero-rated supplies.
Practical UAE example
**Dubai Hospital**: A hospital licensed by DHA provides medical consultations (AED 500 — zero-rated), surgery (AED 20,000 — zero-rated), and medication (AED 500 — zero-rated). The hospital also has a cosmetic surgery department — cosmetic procedures not medically necessary are standard-rated at 5%. The hospital's cafeteria charges 5% VAT on food. The hospital recovers input tax on medical equipment, supplies, and staff because it makes zero-rated healthcare supplies.
Key takeaways
Healthcare by qualifying providers is zero-rated.
Qualifying: hospitals, clinics, licensed medical professionals.
Cosmetic procedures (not medically necessary) are standard-rated at 5%.
OTC medicines sold by pharmacies are standard-rated; medicines in hospitals are zero-rated.
Authoritative sources
Federal Decree-Law No. 8 of 2017 on Value Added Tax
United Arab Emirates — Federal Tax Authority · The VAT Law — Articles 1 to 82 (as amended by Federal Decree-Law No. 18 of 2022)
Effective: 1 Jan 2018Verified: 5 Oct 2026View source
Cabinet Decision No. 52 of 2017 on the Executive Regulations of the Federal Decree-Law No. 8 of 2017 on VAT
United Arab Emirates — Cabinet / Federal Tax Authority · Executive Regulations (as amended by Cabinet Decisions No. 46/2020, 24/2021, 88/2021, 99/2022, 100/2024, and 100/2025)
Effective: 1 Jan 2018Verified: 5 Oct 2026View source
FTA — VAT Guides, References & Public Clarifications
UAE Federal Tax Authority · Taxable person guides, tax invoice guides, input tax guides, designated zones, real estate
Effective: 1 Jan 2018Verified: 5 Oct 2026View source
Knowledge check
1. When are healthcare services zero-rated in the UAE?
This lesson is general educational content, not individualized tax or legal advice. Always consult a qualified professional for your specific situation.