Most healthcare services in the UAE are zero-rated for VAT — 0% rather than exempt — when they are preventive or basic healthcare supplied by a licensed provider, while cosmetic and wellness services are standard-rated at 5%. From 1 October 2026, Cabinet Decision No. 149 of 2026 consolidates the zero-rating rules for medical goods and tightens the definitions clinics must apply.
What is zero-rated
Federal Decree-Law No. 8 of 2017 on VAT zero-rates the supply of preventive and basic healthcare services and related goods and services (Article 45(14)). The Executive Regulation (Cabinet Decision No. 52 of 2017, Article 41) sets the conditions: the service must be supplied by a healthcare body or institution, doctor, nurse, technician, dentist or pharmacy licensed by the Ministry of Health and Community Protection or another competent health authority, and must relate to human health (Cabinet Decision 52 of 2017, Article 41). Zero-rating means the clinic charges 0% VAT but can still recover input tax on its costs — a material cash-flow advantage over exempt treatment.
What is standard-rated at 5%
The Executive Regulation excludes several categories from healthcare services, so they carry the standard 5% rate: elective cosmetic treatment not prescribed by a doctor for treating or preventing a medical condition, any healthcare element incidental to holiday accommodation or entertainment, and similar non-medical supplies. Wellness services — spas, beauty salons, non-medical fitness — are outside the zero-rating entirely.
The 1 October 2026 changes
Cabinet Decision No. 149 of 2026 (issued 1 September 2026, effective 1 October 2026) rewrites the zero-rating provisions for medical goods: the supply or import of a medical product specified in a Cabinet decision, and goods supplied in the course of zero-rated healthcare services that are necessary for providing them, are zero-rated — consolidating the old pharmaceutical and medical-equipment wording into a single rule aligned with the current healthcare legislative framework (Deloitte summary of Cabinet Decision 149 of 2026). Revised input-tax apportionment rules in the same Decision apply from the first tax year starting after 1 October 2027 — for calendar-year clinics, from 1 January 2028 — so partly exempt groups should review their recovery methodology now.
VAT treatment by service type
| Supply | VAT treatment | Condition to check |
|---|---|---|
| Consultation, treatment, surgery by a licensed doctor/dentist | Zero-rated (0%) | Provider licensed; service relates to human health |
| Preventive care and vaccinations | Zero-rated (0%) | Supplied by a licensed healthcare body |
| Registered medication dispensed in treatment | Zero-rated (0%) | Per the Cabinet-decided medical products list from 1 Oct 2026 |
| Medical equipment necessary for zero-rated services | Zero-rated (0%) | Necessary for the provision of the zero-rated service |
| Elective cosmetic procedures (not medically prescribed) | Standard 5% | Excluded from healthcare services definition |
| Spa, wellness, non-medical fitness | Standard 5% | Outside zero-rating entirely |
| Retail sale of non-medical products (e.g. supplements, cosmetics) | Standard 5% | Not related goods/services of zero-rated healthcare |
Decision path for a clinic or practice
- Confirm the supplier's licence type (MoHAP, DHA, DoH or free-zone health authority).
- Test the service against the healthcare definition — treatment or prevention of a medical condition, related to human health.
- If zero-rated, charge 0% and recover input VAT on related costs in full.
- If excluded (cosmetic, wellness), charge 5%.
- Where you make both zero-rated and standard-rated supplies, review the input-tax apportionment method before the new Article 55 rules bite in 2028.
Records and filing
Zero-rating is conditional, so the licence evidence and the medical justification sit behind every 0% invoice. Keep licence copies, practitioner registrations and product-approval documents with the VAT records for at least five years, and reconcile the 0% versus 5% split by service line each quarter so the return can be substantiated in an FTA audit.
FAQ
Is VAT charged on doctor consultations in the UAE? No, when the consultation is a preventive or basic healthcare service supplied by a licensed provider — it is zero-rated at 0%.
Are cosmetic procedures VAT-free? No. Elective cosmetic treatment not prescribed to treat or prevent a medical condition is standard-rated at 5%.
What changes on 1 October 2026 for clinics? Cabinet Decision No. 149 of 2026 consolidates the zero-rating of medical products and necessary goods, and updates employee-benefit and apportionment rules in the VAT Executive Regulation.
Finanshels provides VAT registration and VAT filing for UAE clinics and healthcare groups, including zero-rating substantiation and apportionment reviews. Clinics reconciling prior-period errors can also see our guide on correcting errors in a filed VAT return.
