The supply of educational services shall be zero rated if the following conditions are met:
In accordance with the curriculum recognised by the Ministry of Education, Ministry of Higher Education and Scientific Research, or the competent government entity regulating the education sector in the Emirate in which the course is delivered.
By a supplier of the educational services is an educational institution which is recognised by the MinistryofEducation orMinistryofHigherEducation and Scientific Research, or the competent government entity regulating the education sector in the Emirate in which the course is delivered.
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.
A supply of Goods or Services and Printed and digital reading material provided by a recognized educational institutions which are related to the curriculum of an education shall be zero-rated.
The following supplies are not considered education related and therefore are not to be zero-rated:
- Goods and Services supplied by the recognized educational institution that are made available to Persons who are not enrolled in the educational institution;
- Any Goods other than educational materials provided by the recognized educational institution that are consumed or transformed by the students undertaking the educational service for the purposes of education;
- Uniforms or any other clothing which are required to be worn by the recognized educational institution irrespective of whether or not supplied by the educational institutions as part of the supply of educational services;
- Electronic devices in relation to educational services, irrespective of whether or not supplied by the recognized educational institution as part of the supply of educational services;
- Food and beverages supplied at the recognized educational, including supplies from vending machines or vouchers in respect of food and beverages;
- Excursions or field trip, unless the excursion or field trip is directly related to the curriculum of an education service and is not predominantly recreational;
- Extracurricular activities provided by or through the recognized educational institution for a fee additional to the fee for the education service;
- A supply of membership in a student organisation
In summary: A careful assessment of the capabilities of existing infrastructure and resources, including accounting policies and transactions, financial reporting, and IT systems is critical in order to generate VAT compliant outputs in the Educational sector. In many cases, significant changes will be required to IT platforms and present workflows and processes. It is essential that your staff are fully cognizant of VAT. It will be difficult to ‘systemize’ the VAT rules for all supplies made by you- nuances in the VAT law or slight changes in fact scenarios can lead to varying VAT outcomes.