The fundamentals of VAT in the UAE

Goods and services under VAT

What categories of goods and services are subject to VAT in the UAE?

There are two main types of supplies in the UAE.

1. Exempted supplies

Tax amounts are not charged on exempted supplies. Some of the commonly exempted supplies include bare land, residential property leases, local transportation, and certain financial services. However, you still need to report exempt supplies in your VAT return.

2. Taxable supplies

These supplies could be subject to a standard tax rate or a zero tax rate.

  • The standard-rated supplies under the UAE VAT commonly include commercial property sales or leases, retail purchases, car sales and rentals, hotels and restaurants, and repairs and maintenance services.
  • The zero-rated supplies under the UAE VAT commonly include healthcare, medicine and equipment, international transport, the first sale of residential, education, investment in gold, silver, and platinum, exports, and crude oils and natural gas.