UAE: Medical equipment zero-rated for VAT (COVID-19)

UAE: Medical equipment zero-rated for VAT (COVID-19)

The tax authority released a clarification concerning value added tax (VAT) and allowing a zero-rating of certain medical equipment.


Under these measures, the supply or import of certain personal protective equipment made in the period from 1 September 2020 to 28 February 2021 when used for protection from the coronavirus (COVID-19) is considered to be medical equipment subject to VAT at a zero-rate (0%). Supplies or imports after 28 February 2021 will be subject to VAT at a rate of 5%.

Eligible medical equipment includes:

  • Medical face masks
  • Half-filtered face masks
  • Non-medical “community” face masks (made from textile)
  • Single-use gloves
  • Chemical disinfectants and antiseptics intended for use on the human body (but excluding detergents, cosmetics and personal care products)

The application of zero-rating is effective retroactively from 1 September 2020. Accordingly, a supplier may need to issue and deliver a tax credit note to the recipient in order to refund any VAT overcharged on the supply of the qualifying medical equipment during the relevant period. If the recipient cannot be identified, the supplier must report and remit the collected amount of VAT to the tax authority.

Read a January 2021 report prepared by the KPMG member firm in UAE

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