Healthcare sector largely spared from 5% VAT in UAE

VAT will not be charged from patients for treatment, medicine costs and surgeries.

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The healthcare sector has been largely relieved from value-added tax (VAT) in the UAE.

According to the Federal Tax Authority, preventive healthcare services, including vaccinations, treatment of humans such as medical and dental services, have been spared from the five per cent VAT – which will come into effect from January 1, 2018. Cosmetics treatment will be subject to five per cent VAT.

“Healthcare which is not related to preventive or treatment will be subject to five per cent VAT. But the following healthcare services related to well-being of human beings are zero-rated: Preventive healthcare including vaccinations; treatment-related services including medical services and dental; pharmaceutical products and medical equipment identified by the Cabinet decision,” said Girish Chand, director, MCA Management Consultants.

Under the regulations, VAT will not be charged from patients for treatment, medicine costs and surgeries directly related to the health of the residents.

Srinivas Achar, chief financial officer, National Hospital, said VAT will not be applicable when it is for the well-being provided by hospitals, doctors and pharmacies.

In terms of readiness of the companies, Achar said some companies are ready while others are not.

According to Alpen Capital’s GCC Healthcare Industry report, the UAE healthcare market is projected to reach Dh71.56 billion by 2020.

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