Page 11 - ICAI UAE TAX UPDATE_AUGUST 2024

5 ARTICLES FROM MEMBERS

5.1 VAT Impact on Education-Related Transactions

in the UAE

CA Neetu Jose

1. VAT Treatment of Tuition Fees
Educational services are generally zero-rated under UAE VAT laws if they meet the following criteria:

• Provided by educational institutions approved by relevant authorities and following a recognized curriculum (e.g.,
nurseries, preschools, schools).
• For higher education institutions (e.g., colleges, universities), they must either be government-owned or receive
more than 50% of their funding from the local or federal government.
If these criteria are not met, educational services are subject to VAT at the standard rate of 5%.

2. Extracurricular Activities
Extracurricular activities, when charged separately from tuition fees, are subject to VAT at the standard rate of 5%.

3. Student Organization Membership
Membership fees for student organizations are taxable at the standard rate of 5%.
4. Student Accommodation
The supply of student accommodation, except for the first supply of a new residential building, is VAT-exempt.
However, educational institutions providing accommodation cannot recover VAT on expenses directly related to
the provision of accommodation.

5. Grants and Sponsorship Income
The VAT treatment of grants and sponsorship income depends on whether the institution provides benefits in
return for the funding. If there is a benefit, such as naming rights or discounted tickets, the supply may be taxable.
If no significant benefit is provided, the income is outside the scope of VAT.

6. Books and Educational Materials
Goods and services directly related to zero-rated educational services, such as books and digital materials, are also

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