Healthcare services that are not basic or preventive in nature but more cosmetic are subject to the standard 5 per cent VAT rate, tax experts said.
The majority of healthcare services under the UAE VAT law have been classified as zero-rated. This effectively means that such services are subject to VAT at zero per cent but with the eligibility to recover the VAT incurred on associated costs.
"The government has a keen interest and focus on promoting the healthcare industry in the UAE. Keeping this intent in mind, the government has kept basic and preventive healthcare supply at a zero rate of VAT. But there are a lot of activities that are still subject to VAT," said Nimish Goel, partner at WTS Dhruva Consultants, while addressing a seminar on VAT.
VAT is GCC Countries’ Silver Lining in This Dire Phase
More Than 296,000 Businesses Registered for VAT in UAE
Research reports suggest healthcare expenditure is projected to reach in excess of $100 billion in the GCC, with the UAE playing a prominent role. It is estimated that the UAE healthcare market is projected to reach Dh71.56 billion by 2020.
Dr Ramadan AlBlooshi, CEO, Dubai Healthcare City Authority - Regulatory (DHCR), said following the introduction of VAT at the beginning of last year, the authority received enquiries about its implementation.
"We are keen to provide a platform to help stakeholders have a better understanding of VAT to facilitate compliance in the free zone," he said.
By Waheed Abbas
Copyright © 2019 Khaleej Times. All Rights Reserved.