VAT Clarification for Zero Rated Supplies in the UAE

VAT Clarification for Zero Rated Supplies in the UAE

The Federal Tax Authority of UAE released a public clarification on the temporary zero-rating of specific medical equipment. This notification informs the public about VAT exemption on the supply or import of specific medical equipment from September 1, 2020, until December 31, 2021.

In this notification, the FTA clarifies the applicable VAT on medical equipment in the UAE and the situations where zero-rated VAT applies. The remedial measures when 5% VAT is applicable on the specified medical equipment instead of 0% rate.

This clarification is related to the Cabinet Decision No. 9/12 of 2020, issued on September 1, 2020, the Ministerial Decision No. 380 of 2020, issued on December 6, 2020, and Cabinet Decision No. 15/3 of 2021. All these decisions together allowed for the temporary application of zero-rated VAT on certain imports and supplies of medical equipment until December 31, 2021.

The type of medical equipment in the UAE covered under this clarification includes only the personal protective gear for Covid-19.

Which products/materials fall under zero-rated supplies in the UAE? The following are the types of medical equipment covered under the Decision:

  • Medical face masks that do not fall under the ambit of the Cabinet Decision No. 56 of 2017 on Medications and Medical Equipment Subject to Tax at Zero Rate
  • Half-filtered face masks
  • Non-medical community face masks made from textile
  • Single-use gloves
  • Chemical disinfectants and antiseptics to be applied to the human body, excluding detergents, cosmetics, and personal care products.

Following are the situations when the zero-rated VAT is applied to the above-mentioned medical equipment:

  • The supply of medical equipment where the date of supply, delivery date, and placement date at the recipient’s disposal falls between September 1, 2020, and December 31, 2021.
  • The import of medical equipment falls between September 1, 2020, and December 31, 2021.

For supply, delivery, and medical equipment happening before September 1, 2020, or after December 31, 2021, the VAT is 5%. Similarly, if the import of medical equipment is before September 1, 2020, or after December 31, 2021, the VAT is 5%. These are the usual VAT rates applicable on the import—the supply of the specified medical equipment at regular times.


The FTA also clarified when a supplier charges VAT at 5% while the applicable rate is zero. Two situations arise in this case:

  • Suppose the supplier can identify the recipient. In that case, the supplier will issue a tax credit note in the recipient’s name to refund the overcharged amount of VAT. In addition, the supplier shall lower its output tax by the same amount as the one mentioned in the tax credit note.
  • For example, if the supplier is not able to identify the recipient. In that case, the supplier will not be able to issue and deliver the tax credit note. Therefore, he must account for the collected VAT amount in the tax return for the relevant tax period he supplied the materials.

You must clarify the applicable VAT rates for any business supplying and importing the specified medical equipment the personal protective gear from the Covid-19 pandemic. Are you still confused about zero-rated supplies in the UAE? You can count on a professional firm like NR Doshi & Partners if you require professional guidance.


Ride on the success of VAT compliance with NR Doshi & Partners. Call us now.


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We are a firm with expertise in VAT consulting for all types of businesses in varied industry sectors. We have been serving the UAE businesses in AT advisory services since January 1, 2018, when VAT came into effect in the country. Our expert VAT consulting services include registration, deregistration, return filing, employee learning and training programs, and accounting. In addition to VAT advisory services, our expertise lies in accounting and finance, audit and assurance, business setup, and advisory services.


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