The VAT filing and VAT implications for the healthcare sector are complex. Many industries related to healthcare are supplying, producing, and administrating a variety of services. You will witness a complex VAT filing and implications in the UAE. VAT consultants in Dubai explain it better because the healthcare industry’s VAT tax is complicated. There are taxable, exempt, and zero-rated supplies in the healthcare sector.
There is an interesting factor for all the businesses in UAE in the health sector. They can reclaim the VAT incurred to the healthcare services. The UAE government has adopted a zero-rated VAT treatment of the healthcare service in the UAE. If you are interested to know more about your eligibility and the VAT returns, then keep reading this blog.
What is VAT?
VAT is a type of tax levied on goods and services. The businesses have to pay for the goods and services to the government of the UAE. Value Added Tax (VAT) is the tax on the consumption of services and goods. VAT of 5 % is levied on the goods and services.
Businesses must register for VAT if their taxable imports and supplies exceed AED 375,000 annually. VAT is also optional if the taxable supplies exceed AED 187,500 annually. So, if you are eligible for the UAE VAT, then you can also consult a VAT consultants in Dubai.
What are the VAT rates in the UAE?
The standard VAT in the UAE is 5%. It applies to most goods and services with a few exemptions. You don’t have to worry about paying for it, no matter what.
Zero-rated supplies apply to services and goods that are exported outside the VAT-implementing GULF Cooperation Council (GCC) member states. These include the supply of international transportation, natural gas, and some other areas such as education and healthcare. If you have a business in natural gas or other international transportation, then you do not have to pay VAT returns. But you still have to register for the VAT filing in UAE and show the 0% VAT rate.
Don’t skip the upcoming parts of the blog because we are about to discuss the eligibility of healthcare services for VAT. If you still want to discuss your business in detail, then a VAT Consultants in Dubai is the best option.
Which healthcare services are subject to VAT?
In the UAE, the government has decided to apply a 0% VAT policy on healthcare services instead of applying for exemptions.
Many healthcare-related services are subject to VAT at 5%. The best way to ensure compliance is to get in touch with the Best VAT Consultants in Dubai.
Which healthcare services are exempt from VAT?
The following services in the healthcare sector are subject to 0% VAT. The businesses providing these services will have to register for VAT.
- Healthcare services and preventive treatment provided by government/ private hospitals. Nurse, physician, or licensed practitioner by the Ministry of Health and Prevention or any other authorities.
- Medical equipment and medicine as approved by the Ministry of Health and Prevention.
The standard VAT rate in the UAE
The following services and goods are subject to a standard VAT rate of 5% in the healthcare sector.
- Healthcare services like therapy (acupuncture, Chinese, and reflexology) and cosmetic surgery that are not for prevention.
- Medical equipment and medication that is not approved by the Ministry of Health and Prevention. Massage machines and laser equipment for cosmetic purposes are included.
Medical exemption from VAT
As per the Federal Tax Authority law, only a few medical services qualify for VAT exemption. According to the VAT Consolidation Act 2010. These services include:
Professional medical services are provided by the Department of Health. In these services, optical and dental services are not included. These also include psychologists, dieticians, orthoptists, and occupational therapists.
Other medical services include Osteopaths, Chiropodists, and Chiropractors.
It is very important for you to understand the zero-rated VAT and exempt services. If you still need clarification about the VAT zero-rated and exempt services. Then, you should consult the VAT consultants in Dubai.
Services provided by a pharmacist are taxable under VAT in UAE. However, these services are exempt from VAT:
- Zoster vaccines
- Flu vaccines
- Pneumococcal Vaccines
How to calculate VAT on healthcare services?
It is simple to calculate the VAT. There is a standard formula to calculate VAT. The formula is to add 5% VAT to the sale price. For instance, the taxable service price is AED 200. The buyer has to pay VAT of AED 5 (200×5). Similarly, in healthcare services, the formula would be the same to calculate VAT. The best option can be to use the online VAT calculator in UAE.
How to claim VAT refunds on healthcare services
If you can claim a VAT refund on healthcare services, then yes. You can do this online through the FTA’s e-services portal. You can submit a physical claim form with the essential documentation at an FTA service center. The timeline for VAT refund claims can vary, but you can expect to receive a decision within 30 days.
You should also request a VAT refund in the UAE. You have to just go to the ‘VAT’ tab and then to the ‘VAT Refund.’ You can send a VAT Refund Request on the portal.
Conclusion
If you are concerned about the VAT filing in the UAE, then you can rely on us. In this blog, we discussed the UAE VAT and VAT implications on healthcare services in the UAE. We discussed the main points in the VAT rules and regulations about the healthcare sector.
However, you must want to discuss your particular business in detail. You are in the right hands, and we will give you all the updated guide on VAT filing in UAE. ebs is one of the best VAT consultants in Dubai. It is advisable to consult the best VAT consultancy in the UAE. ebs is one of the best accounting and bookkeeping firms in the UAE. We provide comprehensive services about VAT and other applied taxes in UAE. Our professional team will help you to stay compliant with your VAT and corporate tax.
Feel free to contact us and book a free consultation. We provide these services, accounting and bookkeeping services, VAT services, Auditing, Due Diligence audit services, and many more.