The Federal Tax Authority has published VATP025, which replaces Public Clarification VATP023 on “Temporary Zero-rating of Certain Medical Equipment”.

  1. Date extended till 31st December-2021 for VAT at the rate of 0% on certain supplies and import of medical equipment.
  2. After 31st December-2021, if there is any supply then normal procedures shall apply.
Scope of the relief

The “medical equipment” to which the temporary zero-rating rules apply are personal protective equipment used for the protection from Covid-19, and which contain the features and meet the specifications determined and specified by the Ministerial Decision. Such medical equipment are limited to:

  • Medical face masks (of Approved Standards 14683 and UAE.S ASTM F2100)
  • Half filtered face mask (UAE.S EN 149)
  • Non – Medical “community” face mask made from textile (UAE.S 1956)
  • Single-use gloves (UAE.S ISO 374-2)
  • Chemical disinfectants and antiseptics intended for use on the human body, but excluding detergents, cosmetics and personal care products (UAE.S EN 1276, EN 1650, and EN 14476:2013+A2

The medical equipment mentioned in the Ministerial Decision are zero-rated in the following circumstances:

  1. In respect of supplies of medical equipment, a supply can be zero-rated where the date of supply takes place, and the medical equipment is delivered to the recipient or placed at the recipient’s disposal in the period from 1 September 2020 to 31 December 2021.
  2. In respect of imports of medical equipment, an import can be zero-rated when the medical equipment is imported in the period from 1 September 2020 to 31 December 2021.

Any supplies or importations falling outside these dates will be subject to VAT at 5%.

Retrospective effect

The Cabinet Decision is effective from 1 September 2020. As a result, any supplier that has charged VAT at a rate of 5% on any goods that were eligible for zero-rating under the temporary relief, can now issue a credit note to refund the VAT overcharged, provided the supplier is aware of the identity of the recipient.  No credit note, or adjustment of the VAT charged, is possible where the identity of the customer is not known – for example, this may be the case with retail sales.