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zero-rated. However, if the educational service is taxable, the related materials will be taxed at the standard rate of
5%.
7. Uniforms and Clothing
Uniforms or other required clothing, even if part of the educational service, are taxable at the standard rate of 5%.
8. Electronic Devices
Electronic devices used in educational services, even when supplied as part of the service, are subject to VAT at the
standard rate.
9. Food and Beverages
All food and beverage supplies, including those from vending machines or provided through vouchers, are taxable
at the standard rate.
10. Field Trips
Field trips are taxable at the standard rate unless they are directly related to the curriculum and are not primarily
recreational.
11. Research Funding
The VAT treatment of research funding can be complex. If the educational institution provides deliverables or
intellectual property in exchange for the funding, it may be taxable. If the funder receives no significant benefit,
except for incidental updates or progress reports, the funding is outside the scope of VAT.
12. Transportation Services
Transportation services provided to students between their homes and the educational institution, do not meet the
conditions to be treated as a qualifying means of transport for the zero-rating provisions. Such means of transport
shall therefore be subject to the standard VAT rate.( Public Clarification VAT P007)
Input VAT Recovery for Educational Supplies
Educational institutions that supply standard-rated or zero-rated services can recover input VAT related to these
supplies. However, VAT incurred on exempt supplies is not recoverable. When an institution provides both taxable
and exempt supplies, input tax apportionment is required, which can be complex. The recoverable VAT is determined
based on the proportion of taxable supplies to total supplies.
This overview provides insight into the VAT implications for educational institutions in the UAE, assisting them in
understanding their VAT liabilities and recovery options.
12 www.icaidubai.org
UAE TAX UPDATE NEWSLETTER ISSUE 05 - August 2024
