Education and health care largely escape VAT price increase

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The Federal Tax Authority (FTA) delivered a piece of welcome news to UAE residents on Wednesday morning, when it confirmed that both education and healthcare will be zero-rated when the country introduces VAT next year.

There has been some confusion since August 2017, which the FTA blames on a mistranslation, as to whether or not private education would be subject to a 5 percent rate hike on January 1, 2018.

According to the long-awaited draft of the FTA’s executive regulations on VAT, the supply of educational services shall be zero-rated if the following conditions are met: Firstly, the institution’s curriculum must be in accordance with the Ministry of Education, and secondly, the institution must be recognized by the Ministry of Education.

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