Dubai: There has been some confusion since August 2017 as to whether or not private education would be subject to a 5 per cent rate hike on January 1, 2018.
According to the recently released executive regulations on value added tax (VAT), the supply of educational services shall be zero-rated if the following conditions are met: Firstly, the institution’s curriculum must be in accordance with the Ministry of Education, and secondly, the institution must be recognised by the Ministry of Education.
Educational services, the executive regulations state, must be provided in accordance with “the curriculum recognised by the Ministry of Education, Ministry of Higher Education and Scientific Research, or the competent government entity regulating the education sector in the emirate in which the course is delivered.”
The regulations add that the supplier of the educational services must also be “an educational institution which is recognised by the Ministry of Education or Ministry of Higher Education and Scientific Research, or the competent government entity regulating the education sector in the emirate in which the course is delivered,” in order to be zero-rated.
As for institutions of higher education, such as universities, the institution must either be “owned by the federal or local government or receive more than 50 per cent of its annual funding directly from the federal or local government”.
