The UAE Government has confirmed that Value Added Tax (VAT) will be implemented in the UAE effective 1st of January 2018 at a standard rate of 5%. Wherever applicable, VAT will be collected on taxable supplies of goods and services in the UAE, including health insurance premiums.
The National Health Insurance Company – Daman PJSC will comply with this Government mandate from the 1st of January 2018.
The standard VAT rate of 5% will apply to all health insurance products issued on or after the 1st of January 2018. There are separate provisions that apply for transition policies i.e., ongoing policies where the policy coverage extends to 2018.
Further information will be made available on our website in the coming weeks.
What is Value Added Tax?
Value Added Tax is an indirect tax that is being introduced by the UAE Government, which will be payable by both businesses and individuals.
Is VAT mandatory?
Yes, unless there is an exception under the Federal Law that VAT does not apply to a particular set of goods and/or services. Exceptions are published by the Federal Tax Authority.
There is a possibility for business owners to claim back their VAT contribution, provided they have registered for VAT and meet the requirements. For further information, please visit www.tax.gov.ae
Is Daman registered with the Tax Authority?
What is the Tax Registration Number (TRN) for Daman?
Will VAT apply only for policies with a start date after January 1st 2018?
No, there are also certain rules that apply for transition policies i.e., ongoing policies where the policy coverage extends to 2018.
The current understanding is that VAT will also be payable for that period. Where the insurance policy is issued in 2017 and expires in 2018, tax will be applicable for the time period where health insurance coverage is provided in 2018.
For example, where a policy is issued on the 1st of October 2017 and expires on the 30th of September 2018, VAT at the rate of 5% will be pro-rated for the nine (9) months (1st of January 2018 – 30th of September 2018) that the policy is in effect.
Will pro-rata VAT apply for policies with a start date prior to January 1st 2018 but that extends into 2018?
Yes. Where a policy is issued on the 1st October 2017 and expires on the 30th September 2018, VAT at the rate of 5% will be pro-rated for the nine (9) months (1st of January 2018 – 30th of September 2018) that the policy is in effect.
Will VAT be shown as a separate charge on invoices (both for new business and renewals)?
The invoice will display the VAT charge based on the final number of members enrolled under the policy at the time of enrolment.
For transition policies, a revised invoice will be issued to you on or after 1st of January 2018 setting out the pro-rated VAT charge.
Will policy wordings/terms and conditions for clients be amended due to the VAT?
Yes, terms and conditions in the policy wording have been amended to include provisions on VAT.
A copy of the policy terms and conditions can be found here.
For group policies, would you require TRN registration number (TRN) from the group before you can invoice them?
Yes, the TRN is required so that it is reflected on our invoice. The inclusion of your TRN on our bill is required for you to recover the incurred VAT within your VAT return. We will contact you shortly for this information.
Where can I find more information about VAT?
Please visit the website for the Federal Tax Authority – www.tax.gov.ae