What are Zero Rated VAT items in UAE

3. Oil and Gas

List of Supplies under 5% VAT rate

• Products of gas and oil (including petrol at the pump)

List of Supplies under 0% VAT rate

• Natural gas and crude oil

4. Transportation Sector

List of Supplies under 0% VAT rate

• International transportation of passengers and goods (including intra-GCC flights)
• Supply of means of transport (sea, land, and air) for commercial purposes of goods and passengers (more than ten people) transportation
• Supply of services and goods related to those particular means of transport and transportation of passengers and goods

List of Supplies Exempt from VAT

• Transportation of domestic passengers (including the flights within the UAE)

Know about the basic requirements of VAT registration in the UAE.

5. Real Estate Sector

List of Services under 5% VAT rate

• Sale and rent of commercial properties (not used for the residential purpose)
• Serviced accommodations like motels, hotels, etc.,
• Personal home owned by a UAE citizen (recoverable tax)

List of Services under 0% VAT rate

• First sale/rent of residential building after the construction or conversion finishes
• The first sale of a building used for charitable causes

List of Services Exempt from VAT

• Sale or rent of residential building following the first supply
• Bare land

6. Financial Services Sector

List of Services under 5% VAT rate

• Products having an explicit fee, commission, discount, rebate, or similar element

List of Services Exempt from VAT

• Products based on margin (products without an explicit fee, rebate, commission, discount, or similar element)
• Interest on various forms of lending (like loans, credit, financing lease, and cards)
• Issue, allotment, or transfer of equity or debt security

7. Insurance and reinsurance Service Sector

List of Services under 5% VAT rate

• Insurance and reinsurance (including motor, property, and health)

List of Services Exempt from VAT

• Life insurance and reinsurance

8. Investment (Gold, Silver, and Platinum)

List of Supplies under 5% VAT rate

• Less than 99% pure
• Jewelry

List of Supplies under 0% VAT rate

• 99% or purer and tradable in global markets

9. Telecommunications and other electronic Services

List of Services under 5% VAT rate

• Wireless and wired telecommunications and electronic Services

10. Food and Beverages

List of Supplies under 5% VAT rate

• Food and Beverages

11. Government Activities

List of Services with VAT considered outside the VAT framework

• Sovereign activities that are not in competition with the private sector undertaken by the designated government entities

List of Services under the VAT rates dependent on service/goods ignoring the provider

• Activities that are not considered sovereign or in competition with the private sector

12. Non-profit Organizations

List of Services considered outside the VAT framework

• Activities of international organizations, diplomatic bodies, foreign governments, and missions acting as such (if not in business in the UAE)
• Charitable activities carried out by societies and associations of public welfare listed by the Cabinet decision
• Exercises and other non-profit organizations (not mentioned in the Cabinet decision) which are not business activities

List of Services whose VAT rate depends on service/good ignoring the provider

• Business activities are undertaken by the organizations mentioned above

13. Free Zones

List of Services and Supplies considered outside the VAT framework

• Supplies of goods between the business in designated zones

List of Services and Supplies whose VAT rate depends on services ignoring the location

• Supplies of services and interests in the non-designated zones
• Supplies of services between the businesses in designated zones
• Supplies of services and goods from the mainland to the designated zones or vice versa

14. Others

List of Supplies and Services under 5% VAT rate

• Any supplies of goods and services (includes any item that is sold in the UAE or service provided
• Second-hand goods (used vehicles sold by retailers), collector’s items, and antiques (5% of the profit margin)

List of Supplies and Services under 0% VAT rate

• Export of services and goods to outside the GCC Implementing States

List of Supplies and Services considered outside the VAT framework

• Activities carried out by the employees in the course of their employment (including salaries)
• Supplies between members of a single tax group

Are these VAT regulations confusing you? Do you want to outsource or avail of VAT services like registration, consultancy services, VAT returns filing services, VAT Implementation services for your UAE-based establishment? Jaxa Chartered Accountants is your one-stop solution for your company’s Accounting, Taxation, Payroll, and other financial and legal needs. To have a word with our experts, contact us– we’d be happy to help.

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VAT Registration Services in Dubai

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How Can You Prepare For VAT In UAE?

Basic Requirements of VAT Registration in UAE

VAT Refund Policies

VAT Implementation in Dubai

VAT Deregistration Services in Dubai

VAT Return Filing in Dubai

VAT Consultancy Services in Dubai

VAT Rates for Different Industries in the UAE

All you need to know about VAT in UAE

VAT Penalties and Its Legal Actions