Air and other forms of international travel – including aircraft, fares and supplies – are exempt from the UAE’s forthcoming value added tax (VAT), according to a decree.
UAE President Sheikh Khalifa bin Zayed Al Nahyan on Sunday issued a federal decree regulating VAT.
The tax will be imposed from January 2018 with one of the lowest rates in the world – 5 percent on the import and supply of goods and services at each stage of production and distribution, the government said.
However, the decree sets out several exemptions, where so-called “zero-rating” applies.
Among the exemptions are international transportation of passengers and goods by air, sea and land, meaning international airfares will not be subject to the tax.
In addition, goods required to service, supply and maintain the transport industry – including aircraft, new parts and on-board supplies such as catering – will be exempt from the tax, the decree states. More info