Understanding VAT in Healthcare Industry
Healthcare in the UAE is important for everyone. VAT services in this industry include many types of transactions. These transactions have different tax treatments based on the kind of service and people involved in it. People can’t say that all healthcare services are zero rated. You must review every service before you apply tax and tax rates on it.
What Are the Conditions for Zero Rated Healthcare Services?
Healthcare services mean giving treatment to cure a disease or helping to prevent it. To make healthcare services eligible as zero rated, the recipient must be the patient who gets the treatment. The kind of service under zero rated must help in curing or preventing disease. Some services, like cosmetic surgery, are still standard rated.
You can’t say all healthcare services are zero rated. You should check each service transaction in detail. This helps decide if it meets the conditions and which tax rate should be applied.
Main Points for Zero Rated Healthcare Services
- The service must be for curing or preventing a disease.
- The patient who gets treatment should be the recipient.
- Cosmetic or beauty services usually do not qualify as zero rated.
- Each transaction must be reviewed before tax is applied.
Are There Healthcare Services with Standard Rate VAT?
The tax treatment depends on who uses the healthcare service. As the law says, the end user must be the patient. Sometimes, two healthcare providers sign agreements with each other. If a healthcare service provider is the end user, VAT will be at the standard rate.
Example:
A doctor gives consultation in a hospital under an agreement. The hospital pays the doctor monthly, then collects consultation fees from patients. The hospital’s bills to patients are zero rated, but the doctor’s invoice to the hospital has standard VAT.
- If a patient pays for treatment, the hospital charges zero VAT.
- If a hospital pays a doctor for his services, that payment has standard VAT.
Are Medical Tests in Laboratories Zero Rated?
To decide if medical tests are zero rated, you must check if the test is for curing or preventing disease. After that, you need to find out who gets the service.
- If the laboratory is independent and the bill is addressed to the patient, it qualifies as zero rated.
- If the laboratory is part of a hospital and bills the hospital, standard rate VAT applies.
- When a hospital issues a separate invoice for tests to the patient, that invoice is zero rated.
Important Points about Medical Tests
- Medical tests for patients to cure or prevent disease can be zero rated.
- Bills sent directly to patients from independent labs are zero rated.
- Bills from labs working under hospitals to hospitals are standard rated.
How Mubarak Al Ketbi (MAK) Auditing Can Guide You
Mubarak Al Ketbi (MAK) Auditing provides expert guidance on UAE VAT. The team helps businesses understand and apply tax regulations correctly. The consultants organize your tax process, ensure compliance, and guide you in complex transactions. They also give free one-hour consultations to help clarify your VAT concerns.
Key Points:
- Expert advice on UAE VAT compliance
- Guidance on complicated healthcare VAT scenarios
- Support for process organization and documentation
- One-hour free consultation for new clients
How Can Mubarak Al Ketbi (MAK) Auditing Help You?
If you’re feeling lost about VAT in healthcare, Mubarak Al Ketbi (MAK) Auditing can be your guiding light. Their experts walk you through VAT rules, help you sort out paperwork, and give clear answers. When it comes to UAE VAT, don’t let the cat out of the bag—get in touch with professionals who know the ropes!
- For more information, visit our office:
- Saraya Avenue Building – Office M-06, Block/A, Al Garhoud – Dubai – United Arab Emirates
- Or contact/WhatsApp on this number: +971 50 276 2132
