VAT, which is a new tax reform for UAE citizens that was implemented in the nation from 1st January 2018. The UAE government has imposed 5 per-cent value-added tax on various goods and services. UAE citizens or businesses who were worried about the imposition of VAT in health care services would affect the pocket of common man. A good news for them as recently the Federal Tax Authority has announced that preventive healthcare services like human treatments which include medical and dental services, vaccinations, have been exempted from the five-per-cent VAT.
Cosmetic healthcare will be subject to 5 percent VAT.
Healthcare Services which are not related to preventive or treatment has also be subjected to 5 percent VAT.
Table of Contents
- Healthcare Services with Zero VAT
- Download Know your Right Healthcare Service
- Impact of UAE VAT Healthcare
- Impact of VAT on Healthcare Services in UAE
- Zero-Rated versus Exempt VAT
- 5 per-cent VAT on Cosmetic Health Care Services
- 0 Per-cent VAT on Healthcare Services
Healthcare Services with Zero VAT
Vaccinations, medical as well as dental services related to treatment and other similar services related to the well-being of citizens have been zero-rated.
Download Know your Right Healthcare Service
As per Alpen Capital’s GCC Healthcare Industry report, the UAE healthcare market is expected to reach Dh71.56 billion by 2020.
It will also be interesting to see how ready the healthcare companies are for these changes. As for the time being there seems to be some debate on this.
Impact of UAE VAT Healthcare
The Government has announced the impact of VAT on the Medical sector as follows:
|Impact on Healthcare||VAT Rate|
|Preventive health care services (like vaccinations)||0%|
|Other Healthcare services is aimed at treatment of humans (including medical services and dental services)||0%|
|The healthcare services that are not for First Aid and are not preventive e.g.elective, cosmetic, etc.||5%|
|Cabinet Decision is listed in Medicines and medical equipment.||0%|
|Medicines and medical appliance, not listed in Cabinet Decision||5%|
|Other medical equipment||5%|
Impact of VAT on Healthcare Services in UAE
VAT UAE Impact on Common Man
Most of the medical and healthcare services are exempted from the VAT making ease for the common man, however, any options for cosmetic healthcare services taken by the public will attract VAT.
VAT on Hospital Services
Private hospitals in UAE are under the coverage of VAT applicable as most of the private hospitals provide less prioritized medical services including cosmetic and fashion well-being healthcare which makes them vulnerable to the VAT.
Zero-Rated versus Exempt VAT
Zero rates VAT applicable will attract filing of transactions even though there is no tax collection while the exempted VAT services will not even need to attract any filings further.
5 per-cent VAT on Cosmetic Health Care Services
Healthcare services which do not come under preventive or treatment, a 5 percent VAT are being levied on it.
0 Per-cent VAT on Healthcare Services
Healthcare services which include Vaccinations, medical, dental care treatment and services related to it, as well as the well-being of senior citizens. Zero percent VAT has been imposed in the aforementioned medical services in UAE.
The Federal Tax Authority is responsible to take decisions on appropriate VAT rates on medical equipment and pharmaceutical products. VAT will not be imposed whenever the hospitals, doctors and pharmacies have rendered services for the well- being of citizens.
According to the reports by Alpen Capital’s GCC Healthcare Industry, it seems that the market of UAE healthcare is expected to touch Dh71.56 billion by 2020
It is great to be seen that whether the healthcare companies are ready to adopt these changes. After some period of time surely there will be a debate on this.