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Business-to-Business Supplies of Healthcare Services VAT P016

Most goods and services supplied in the UAE by a taxable person are subject to VAT at 5%.

In accordance with Article 41 of Cabinet Decision No. 52 of 2017 on the Executive Regulations of the Federal Decree-Law No 8 of 2017 on Value Added Tax (“Executive Regulations”), healthcare services may be zero-rated if certain conditions are met. For the purposes of the Article, “healthcare services” are defined as:

 “any Service supplied that is generally accepted in the medical profession as being necessary for the treatment of the Recipient of the supply including preventive treatment.”

This gives proper clarification that  the recipient of the supply must also be the patient that receives the treatment. Where the patient and the recipient of the supply are not the same person, the services should therefore be subject to VAT at 5%.

Where a supply of services is made by a healthcare provider, the provider has to consider who the recipient of the supply is in order to determine if the supply shall be zero-rated.

In determining the identity of the recipient of the supply, the starting point should be to consider the contractual position between the parties and, specifically, who is contractually entitled to the services supplied. Thus, although the contractual agreements between parties are not always conclusive in determining the direction of a supply, they should in most circumstances be taken as reflective of the economic and commercial reality of the supply (unless the contractual terms are so artificial that they do not reflect the reality of the transaction).

It should also be noted that the facts that a person may have initiated the supply, may have some interest in the supply, or is required to pay for the supply, are not in themselves determinative that the person in question is the recipient of the supply.


A supply of healthcare services may only be zero-rated if the recipient of the supply is also the person who receives the treatment.

How Can Alya Auditors Help You ?

Like any new legislation, there are always challenges that businesses face while readying themselves for VAT. We have an exclusive team of trained Tax consultants in the UAE. The ALYA team will assist you to steer your business smoothly through the new tax laws.

Our professional VAT consulting services in UAE involves:

  • Providing an understanding of the Tax Laws and Executive Regulations to client companies.
  • Understanding your business model and evaluation of VAT impact on your business.
  • Providing inputs for using VAT compliant software for your company.
  • Exclusive VAT bookkeeping assistance.
  • Providing training to your staff on VAT.
  • Support for VAT registration for your company as individuals or as tax groups.
  • Helping you to prepare and execute all VAT related communication to your trade partners.
  • Providing strategic inputs for conducting your business in the post-VAT age, addressing aspects like pricing, working capital, marketing & communication etc.

ALYA’s VAT consultancy in the UAE assists you to obtain substantial knowledge in VAT and our consultants assure that your business process is totally prepared and skilled for the transition. Over and above the scope of services mentioned above, our VAT consultancy reports would include the following:

Analysis of the influence of VAT on costing, profitability and working capital. This evaluation provides and improved high level understanding to the management regarding the overall VAT impact on the business. Our VAT Implementation programs are backed up by training programs which are done in different modes – online trainings and webinars as well as personalized individual training or department level training on client requirements.

We also provide a general VAT sensitization training to key employees across various departments of the company that are impacted by VAT. This would involve engagement of other functions such as sales, marketing, sales coordination, administration etc. and at times the senior management of the company as well.

At the end of our consultancy, we provide you with a VAT Impact Study report comprising key recommendations, Transaction analysis as well as other aspects that will enable you to implement VAT successfully.

The VAT consultant in UAE should be experienced, having experience in Taxes especially indirect taxes.

You can see the VAT Tax rates .