White Paper on Zero Rating of Educational Supplies conditions and exceptions mentioned in GCC, UAE VAT Laws and Regulations.

1. Zero Rating of Educational Supplies
Farhan Osman
UAE VAT
ZERO RATING OF EDUCATIONAL SUPPLIES
FARHAN OSMAN

2. Zero Rating of Educational Supplies
Farhan Osman
Zero Rated and Standard Rated Supplies
Taxable supplies are classified as Standard (5%) and Zero Rated supplies. As a general rule the following
approach can be used to determine if the supply is standard rated:
Thus if the underlying supply is not out of scope, exempt and zero-rated supply, it would then be
considered as a standard rated supply.
Focusing on zero-rated supplies; zero-rated supplies are taxable supplies subject to 0% tax. A taxable
person can claim the tax incurred on making these zero-rated supplies. It is therefore necessary to take
the value of zero-rated supplies into account while calculating the taxable supplies value for VAT
registration threshold.
GCC Agreement
The agreement guides its member states on various supplies of goods and services which should be
treated as zero-rated supplies either making it compulsory or putting it on discretion of member states.
Articles 29 to 37 of GCC Agreement states the taxability of few certain supplies which must or can be
treated as zero rated supplies by its member states, a summary of those supplies is presented here as
follows:
International Transport Education, Health, Real Estate, Local Transport
Supplies of Goods, Services outside GCC Oil, Oil Derivatives, Gas, Conveyances
Investment of Gold, Silver and Platinum Mat. Financial Services and Used Goods
Standard
Rate
Zero-Rate
= No
Exempt =
No
Out of
Scope =
No
Zero-Rating
Mandatory Discretional

3. Zero Rating of Educational Supplies
Farhan Osman
UAE VAT Laws & Regulations on Zero-Rating
UAE has implemented the zero-rating of goods by laws and regulations based on the discretion given by
GCC agreement, it also allows a taxable person to apply for exemption from registration if they’re only
making zero-rated supplies. However a registered person can claim the input tax incurred on making such
supplies.
Article 44 and 45 of UAE VAT Decree Law states various supplies of goods and services which should be
treated as zero-rated supplies further explained in Article 30 to 41 of UAE VAT Executive Regulations.
Zero-Rating of Education
The zero-rating of Education falls amongst the categories left at the discretion of member states. Article
45(13) of UAE VAT Decree Law establishes that Educational services would be zero-rated under the
conditions and exclusions laid out in Article 40 of UAE VAT Executive Regulations.
Conditions – key rules to determine if supply is zero-rated
Conditions set out in Executive Regulations to treat an education service as zero-rated service are as
follows:
a) Curriculum is recognized by federal or local competent government entity regulating the
education sector where the course is being delivered.
b) Institute who’s offering these recognized courses, is an educational institute recognized by same
authority mentioned above.
c) Or higher educational institute directly controlled by such authority (50% or more funding coming
from authority).
If the conditions are met; all related supplies of goods and services such as printed or digital material etc.
provided by institute would be subject to zero-rate.
Exceptions
Following supplies are mentioned as the exceptions and shouldn’t be treated as zero-rated supplies:
 Related supplies of goods and services to individuals who are not enrolled in the courses
 Goods other than educational material which are consumed or transformed by students
 Uniforms or any other clothes required to be worn
 Electronic devices provided by such institutes
 Food & Beverages provided by such institutes
 Field trips unless directly related and required by the undertaking curriculum
 Supply of membership in student organization
 Extra-curricular activity for an additional fees
All of the aforementioned exceptional supplies of goods and services by qualified institutes and every
other non-accredited educational supply by non-qualified institute would be subject to standard rate VAT
on the value charged to individuals or would be considered as deemed supply if being provided for free
and above the deemed supply threshold.