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Exempt Supplies

What are Exempt Supplies in UAE VAT?

By definition, exempt supplies refer to 'supply of goods or services for a consideration while conducting business in the State, where no tax is due and no Input Tax may be recovered except according to the provisions of the Decree-Law’. In simple words, there are certain exempted goods or services notified in UAE executive regulations, on which VAT is not levied.

On the other hand, businesses supplying these exempted goods or services will not be allowed to claim the input tax paid on their purchases and should treat it as a cost of the product.

Exempted goods and services list in UAE

Exempt supplies are listed in Article 46 of the Federal Decree-Law no. (8) of 2017 on Value Added Tax, such as:

Financial Services

The following financial services are under VAT exemption supplies:

  • Financial services which are not conducted in return for an explicit fee, discount, commission, and rebate or any similar return are exempted.
  • The issue, allotment, or transfer of ownership of an equity security or a debt security are exempted from VAT rate.
  • The provision or transfer of ownership of a life insurance contract or the provision of re-insurance in respect of any such contract is under VAT exempted list.
Residential Buildings

The supply of residential buildings are under VAT exemption subject to the following condition:

  • The lease is more than 6 months or
  • The tenant of the property is a holder of an ID card issued by the Emirates Identity Authority
Bare Land
Local Passenger Transport Services

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