I am trying to present the applicability of VAT on Educational Institutions in UAE as simple as possible. Facts and figures mentioned in the presentation are as per the Federal Law and related publications.

1. VAT ON EDUCATIONAL INSTITUTION
UAE VAT LAW
muhsintv@gmail.com
Source : Federal Tax Law, News Papers etc.

2. VAT Treatment
 Zero Rated if provided by “Qualifying Educational Institution”
• Nurseries, preschools and schools
• Higher educational institutions owned or funded by federal or
local government.
They will be able to recover the input tax they paid on related
cost while filing the tax return.
Not fulfilling the above conditions - VAT @ 5%.

3. VAT Registration by Qualifying
Educational Institution
 If the supplies exceeds more than the threshold (AED 375,000),
needs the registration.
 They can apply for exemptions if no taxable supply (taxable @5%) is
provided.
 No Registration = No input tax Claim

4. All Services provided by
Educational Institution Zero Rated ?
 Only educational services which are provided in
accordance with the curriculum recognised by the
federal or local competent government entity
regulating the education sector where the course is
delivered can be zero-rated

5. Educational Services VAT rate
Private and public school education (excluding
higher education) and related goods and
services provided by education institution
0%
Higher education provided by institution owned
by government or 50% funded by government,
and related goods and services
0%
Education provided by private higher
educational institutions, and related goods and
services
5%
Nursery education and pre-school education 0%
School uniforms 5%
Stationery 5%
Electronic equipment (tablets, laptops, etc.) 5%
Renting of school grounds for events 5%
After school activities for extra fee 5%
After school activities supplied by teachers and
not for extra charge
0%
School trips where purpose is educational and
within curriculum
0%
School trips for recreation or not within
curriculum
5%

6. Any Exceptions to Zero Rating ? (other
than Mentioned in the table)
 Goods and services supplied by a 'qualifying educational institution' to persons
who are not enrolled in it.
 Any goods, other than educational materials provided by a 'qualifying
educational institution', that are consumed or transformed by the students
being taught by it;
 Electronic devices used in educational services, irrespective of whether or not
supplied by a 'qualifying educational institution' as part of the supply of
educational services.
 Food and beverages supplied at a 'qualifying educational institution' including
supplies from vending machines or vouchers in respect of food and
beverages.
 A supply of membership in a student organisation.

7. Private Educational Institutions ?
•No VAT irrespective of
private or Government
owned
Nursery, Pre-
schools,
Schools
•Zero VAT if owned &
Funded by Local
Government
•VAT @ 5% if not the above.
Higher
Education

8. Any General Exemptions ?GeneralExemptions
Students Accommodation
(Comes under Residential Accommodation)
School Transportation
(Comes under Domestic Transportation )
Grant Income/Sponsorship Fees
(If no benefit is transferred to the sponsor)
No Input Tax directly related to the above
can be claimed in the Tax Return

9. What About Grant Funded Research ?
 Institution is required to provide certain deliverables in
return for the funding ? (Example – Intellectual
Property rights, the product of the research etc.) – VAT
@ 5 % is payable on income received.
 If no return needs to be given for Grant, outside the
scope of VAT.
Input tax on costs which are linked with incomes outside
the scope of VAT, cannot be claimed as INPUT.