Is VAT charged on medical equipment and medicines?

Article (2) Supplies Subject to Tax at Zero Rate This is an unofficial translation The supply of Medications and Medical Equipment registered with the Ministry of Health and Prevention, or imported with its permission or approval, shall be subject to tax at zero rate.

Article 41 – Zero-rating Healthcare Services 23 1. The phrase “Healthcare Services” means 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. 23 Article amended as per Cabinet Decision No. 100 of 2024. Cabinet Decision No. 52 of 2017 and its amendments – Unofficial translation 31 2. A supply of healthcare services shall be zero rated on the condition that the supply shall: a. Be made by a healthcare body or institution, doctor, nurse, technician, dentist, or pharmacy, licensed by the Ministry of Health and Prevention or by any other competent authority concerned with healthcare. b. Relate to the wellbeing of a human being. 3. "Healthcare services" do not include any of the following: a. Any part of a supply that relates to staying in or attending an establishment the principal purpose of which is to provide holiday accommodation or entertainment such that any Healthcare Service is incidental to the provision of the accommodation or entertainment. b. Elective treatment for cosmetic reasons other than prescribed by a doctor or medical professional for treating or prevention of a medical condition. 4. A supply of Goods or an Import of Concerned Goods is zero-rated if it is a supply or an Import of: a. Any pharmaceutical products as specified in a decision issued by the Cabinet. b. Any medical equipment as specified in a decision issued by the Cabinet. c. Any other Goods not covered by paragraphs (a) and (b) of this Clause which are supplied in the course of supplying a Person with zero-rated Healthcare Services that are necessary for the supply of such Healthcare Services. Title Seven – Exempt Supplies

Article (31) Supply of Foodstuffs, Medicines and Medical Equipment I: Food Items: All food items shall be subject to the standard Tax rate. Member States may apply the zero-rate on food items mentioned in a unified list of Goods approved by the Financial and Economic Cooperation Committee. II: Medicines and Medical Equipment: Medicines and medical equipment shall be subject to the zero-rate in accordance with unified provisions proposed by the Committee of Ministers of Health and approved by the Financial and Economic Cooperation Committee.

This is not an official Translation: Application of Tax at the Zero Rate on Certain Medical Equipment Cabinet Decision No. (9/12 O) of 2020 Issue Date: 1st September 2020 The Cabinet has decided: 1. The personal protective equipment used for the protection from Covid-19, for which a decision issued from the Minister of Health and Prevention in coordination with the Ministry of Finance specifying and stating its features and technical specifications, shall be considered as Medical Equipment subject to VAT at the zero rate. 2. The supply of Medical Equipment mentioned in Clause (1) of this Decision shall be subject to VAT at the zero rate if the date of supply of the medical equipment, and the date of delivery to the recipient or the date on which they are placed at the recipient’s disposal, occurs within 6 months from the date of this Decision. 3. The import of Medical Equipment mentioned in Clause (1) of this Decision shall be subject to VAT at the zero rate if such medical equipment are imported into the State within 6 months from the date of this Decision. 4. Where the date of import of Medical Equipment, the date of their supply, the date of their delivery to the recipient, or the date on which they are placed at the recipient’s disposal, occurs after 6 months from the date of this Decision, the Medical Equipment shall be subject to VAT at 5% in the tax period in which the date of supply occurs. 5. For the purposes of this Decision, the date of supply shall be determined in accordance with Articles 25 and 26 of the Federal Decree Law No. 8 of 2017 on Value Added Tax. Cabinet Decision No. (9/12 O) of 2020- Issue Date: 1 September 2020 – Unofficial Translation

of the Federal Decree Law No. 8 of 2017 on Value في شأن ضريبة القيمة2017 ) لسنة8( بقانون اتحادي رقم Added Tax. .المضافة The zero-rating rules do not apply in respect of any وال تطبق أحكام نسبة الصفر على توريد أي معدات طبية إذا supply of medical equipment where the date of أو تاريخ تسليمها للمستلم أو وضعها،وقع تاريخ توريدها supply, or the date the medical equipment is ديسمبر31 إلى2020 سبتمبر1 بتصرفه خارج الفترة من delivered to the recipient or placed at the يخضع توريد المعدات الطبية، في مثل هذه الحاالت.2021 recipient’s disposal, falls outside the period from 1 ) ويجب إدراج هذه%5( لضريبة القيمة المضافة بنسبة September 2020 to 31 December 2021. In such الضريبة في إقرار ضريبة القيمة المضافة للفترة (أو situations, the supply of medical equipment is .الفترات) الضريبية التي يقع فيها تاريخ التوريد subject to VAT at 5% and this VAT must be reported in the tax return of the relevant tax period (or periods) where the date of supply occurs. Similarly, medical equipment cannot be zero-rated ال تخضع المعدات الطبية لنسبة الصفر،وعلى غرار ذلك where the date of import is either before 1 أو2020 سبتمبر1 إذا تمّ استيرادها إلى الدولة قبل تاريخ September 2020 or 31 December 2021. In these إذ يكون على المستورد في هذه،2021 ديسمبر31 بعد cases, the importer would be required to account الحاالت احتساب ضريبة القيمة المضافة على االستيراد for VAT on the import at 5% in accordance with the ً وفقا لإلجراءات المعتادة بشأن دفع ضريبة القيمة%5 بنسبة normal procedures for payment of import VAT. .المضافة على االستيراد التطبيق بأثر رجعي Retrospective application The rules allowing for zero-rating of medical تسري القواعد التي تسمح بتطبيق نسبة الصفر على المعدّ ات equipment under the Cabinet Decision are سبتمبر1 الطبية بموجب قرار مجلس الوزراء اعتبارا ً من effective from 1 September 2020. .2020 Where a supplier has charged VAT at 5% on a %5 مورد بفرض ضريبة القيمة المضافة بنسبة ّ في حال قام supply which was eligible for zero-rating under the على توريد مؤهّل للخضوع للضريبة بنسبة الصفر بموجب Cabinet Decision, and the supplier is aware of the وكان هذا المورّ د على علمٍ بهوية،قرار مجلس الوزراء identity of the recipient, the supplier shall issue يجب على المورّ د إصدار إشعار دائن ضريبي،المستلم and deliver a tax credit note to the recipient in وتقديمه إلى المستلم من أجل ردّ ضريبة القيمة المضافة order to refund the VAT overcharged on the في حال، إضافة إلى ذلك.المفروضة بالزيادة على التوريد 4/5