The UAE Federal Tax Authority (FTA) has announced a temporary zero-rated VAT applicable to specific medical equipment imported and used for COVID-19 protection purposes.
The medical equipment imports to which the temporary zero-rated rules apply are personal protective equipment used for the protection from COVID-19, which contain the features and meet the specifications determined and specified by Ministerial Decision. The medical equipment is limited to:
- medical face masks that are not included in Cabinet Decision No. 56 of 2017 on Medications and Medical Equipment Subject to Tax at Zero Rate (under approved standards 14683 and UAE.S ASTM F2100);
- half-filtered face masks (UAE.S EN 149);
- non-medical "community" face masks made from textile (UAE.S 1956);
- single-use gloves (UAE.S ISO 374-2); and
- chemical disinfectants and antiseptics intended for use on the human body, excluding detergents, cosmetics and personal care products (UAE.S EN 1276, EN 1650, and EN 14476:2013+A2).
The application of the zero-rated VAT is limited to medical equipment imported or made at the disposal of suppliers during the period between 1 September 2020 and 28 February 2021. However, the FTA provided that where a supplier has charged a 5% VAT on a supply which was eligible for zero-rating and the supplier is aware of the identity of the recipient, the supplier will issue and deliver a tax credit note to the recipient in order to refund the VAT overcharged on the supply.