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VAT Guide

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UAE VAT rates

There are two VAT rates applicable in the UAE:

  • The standard rate of VAT (5%)

  • The zero rate of VAT (0%)

These rates are applicable to “Taxable Supplies” which are goods or services supplied for a consideration by a person conducting business in the UAE, and does not include “Exempt Supplies”.

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Standard-rated supplies

Standard-rated supplies are taxable supplies that are not zero-rated. They are the majority of goods and services subject to a VAT rate of 5%.

Zero-rated supplies

Zero-rated supplies are goods & services accounted for at a VAT rate of 0%, however, such supplies are still treated as “taxable supplies” in all other respects. 

Subsequently, a business supplying zero-rated goods or services has the right to recover the VAT incurred on their own business expenditure in the same way as they would if they made standard-rated supplies.

List of zero-rated supplies:

  1. Exports of goods/services to non-GCCs VAT-implementing states

  2. Gold, silver, and platinum as an investment

  3. First supply of residential building (sale or rental)

  4. Education (basic fees and books)

  5. Preventive and basic healthcare services and related goods and services

  6. International transport of passengers and goods

  7. Goods and services consumed or used during the international transportation of goods or passengers

  8. The first supply of a building specifically designed to be used by charities.

  9. Crude oil and natural gas.

  10. Air, sea and land means of transport intended for the transportation of passengers or goods

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