Is VAT charged on university tuition fees?
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No VAT is charged on university tuition fees if the university is a recognised educational institution, the course follows a recognised curriculum, and the university is government-owned or receives more than 50% of its annual funding directly from the government — such fees are zero-rated. If those conditions are not met, the fees would be taxed at 5%.
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The detail
University tuition fees are zero-rated (0% VAT) under Article 40(1) of the VAT Executive Regulation if the three conditions are met: the educational services follow a curriculum recognised by the competent government entity, the supplier is a recognised educational institution, and, for higher education institutions, the institution is government-owned or receives more than 50% of its annual funding directly from government. If these conditions are not met, tuition fees are standard-rated at 5%.1
What the law says
- Article 40(1) of the VAT Executive Regulation zero-rates educational services where the supply follows a recognised curriculum, the supplier is a recognised educational institution, and (for higher education) the institution is government-owned or receives more than 50% of its annual funding directly from government [1].1
What it depends on
- The course must be delivered in accordance with a curriculum recognised by the federal or local competent government entity regulating education.1
- The supplier must be an educational institution recognised by that same competent government entity.1
- For higher education institutions, the institution must be either owned by the federal or local government or receive more than 50% of its annual funding directly from the federal or local government.1
Check before you rely on it
- Confirm your university is recognised by the relevant education authority.
- Confirm the course follows a recognised curriculum.
- For private institutions, verify the government funding percentage (over 50% of annual funding directly from government).
Sources (1) — read the official text
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Article 40 – Zero-rating Education Services
Read the article
Article 40 – Zero-rating Education Services 1. The supply of educational services shall be subject to the zero rate if the following conditions are met: 24 Article amended as per Cabinet Decision No. 100 of 2024. Cabinet Decision No. 52 of 2017 and its amendments – As published by the Ministry of Finance 30 a. The supply of educational services is provided in accordance with the curriculum recognised by the federal or local competent government entity regulating the education sector where the course is delivered. b. The supplier of the educational services is an educational institution which is recognised by the federal or local competent government entity regulating the education sector where the course is delivered. c. Where the Supplier of educational services is a higher education institution, the institution is either owned by the federal or local government or receives more than 50% of its annual funding directly from the federal or local government. 2. A supply of Goods or Services made by educational institutions identified in Clause 1 of this Article shall be zero-rated where the supply is directly related to the provision of a zero-rated educational service. 3. Printed and digital reading material provided by educational institutions identified in Clause 1 of this Article and which are related to the curriculum of an education shall be zero-rated. 4. As an exception to Clause 2 of this Article, the following supplies shall not be zerorated: a. Goods and Services supplied by the educational institution referred to in Clause 1 that are made available to Persons who are not enrolled in the educational institution. b. Any Goods other than educational materials provided by the educational institution referred to in Clause 1 that are consumed or transformed by the students undertaking the educational service for the purposes of education. c. Uniforms or any other clothing which are required to be worn by the educational institution referred to in Clause 1, irrespective of whether or not supplied by the educational institutions as part of the supply of educational services. d. Electronic devices in relation to educational services, irrespective of whether or not supplied by the educational institution referred to in Clause 1 as part of the supply of educational services. e. Food and beverages supplied at the educational institution referred to in Clause 1, including supplies from vending machines or vouchers in respect of food and beverages. f. Field trips, unless these are directly related to the curriculum of an education service and are not predominantly recreational. g. Extracurricular activities provided by or through the educational institution referred to in Clause 1 for a fee additional to the fee for the education service. Cabinet Decision No. 52 of 2017 and its amendments – As published by the Ministry of Finance 31 h. A supply of membership in a student organisation.
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Written by AI from the FTA sources above and checked before display. Not tax advice or official FTA information - confirm with a tax adviser before you act. Full disclaimer
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