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DUBAI: The supply of educational services shall be subject to the zero rate if the supply of educational services is provided in accordance with the curriculum recognized by the federal or local competent government entity regulating the education sector where the course is delivered.
This was stated by Dr. Asma Salman, Associate Professor of Finance, Department Chair – Accounting, Finance and Economics College of Business Administration, American University in the Emirates, during an exclusive interview to The Gulf Today on Wednesday.
“Similarly, the educational institution must be recognized as above as well. A supply of Goods or Services made by educational institutions shall be zero-rated where the supply is directly related to the provision of a zero-rated educational service”, she added.
As per the Cabinet Decision on the Executive Regulations of the Federal
Decree-Law, value added tax will be applicable in the UAE from January
1st, 2018.
0%• Nursery education and pre-school education
• After-school activities supplied by teachers and not for extra charge
• School trips where purpose is educational and within curriculum
• Private and public-school education (excluding higher education) and related goods and services provided by education institution
• Higher education provided by institution owned by government or 50% funded by government, and related goods and services
5%• School uniforms and Stationery
• Electronic equipment (tablets, laptops, etc.)
• Renting of school grounds for events
• After school activities for extra fee
• School trips for recreation
• Education provided by private higher educational institutions, and related goods and services
“Value-added tax is defined as a tax imposed on the import and supply of Goods and Services at each stage of production and distribution, including the Deemed Supply.
As a first step, all retailers and suppliers need to register for VAT by Dec 31st, 2017.
Guidance on zero-rated and exempt supplies, so… what really is the zero-rate?
Any supplies, even at 0 per cent rate are required to be recorded in the VAT account and reported in tax returns. Suppliers must register for VAT if the taxable turnover exceeds Dhs 375,000 annually. Now the difference comes between the zero-rated supplies and tax-exempt supplies. The VAT exempt supplies are not taxable; which means that no expenses can be recovered if they are tax-exempt, however exceptions are there. Examples include bare land, financial services including insurance and re-insurance, residential buildings etc.
As responsible citizens we must support and cooperate with the government, because whatever happens will be in the best interest of the country, business and consumers.
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