Parents in the UAE who found out earlier this week that Value Added Tax (VAT) will be zero rated for school and nursery fees will have to pay more for their children’s extracurricular activities once it is implemented from 1 January 2018.
The Federal Decree-Law No. 8 of 2017 for VAT clarified common extracurricular activities amongst residents such as horse riding, maths and English classes, music lessons, drama lessons, sports classes and school transport services will be subject to the 5% tax. This inevitably means the added cost will be passed onto parents who already have the burden of paying ever increasing school fees.