Impact of UAE VAT on Healthcare Services

What is the Impact of VAT on Healthcare Services in Dubai?

After the implementation of VAT law in the UAE, almost all sectors were hit by an escalation of price. This increase was due to the additional tax amount of 5% on the value of the supply. However, Healthcare services are categorized under Zero-Rated supply. It needs to be understood that, healthcare services are under zero-rated supply but health insurance premium was charged with VAT.

No VAT will be charged will providing certain healthcare services and on supply of certain goods, and also VAT incurred in making these supplies will not be recoverable. Healthcare service includes consultation fees, diagnostics test, hospital room charges and medicines. Only certain health services will be zero rated. However, other health related services such as cosmetic services, therapies, television rented to patients, herbal medicines, cosmetic products are subject to VAT, and input VAT on making these supplies will be recoverable.

The following table summarizes the VAT structure on Health Services:

Impact on HealthcareVAT Rate
Preventive health care services including vaccinations.0%
 Healthcare services aimed at treatment of humans, including medical services and dental services.0%
 Other healthcare services that are not for treatment and are not preventive (e.g. elective, cosmetic, etc.).5%
 Medicines and medical equipment as listed in Cabinet Decision.0%
 Medicines and medical equipment not listed in Cabinet Decision.5%
 Other medical supplies.5%

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