No VAT On UAE School Bus Fees

School transport services confirm that bus fees in the UAE will be exempt from VAT, however, operational costs of the buses will increase. For the moment these will be absorbed by schools, bus companies.
No VAT On UAE School Bus Fees
By Veathika
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It’s been confirmed that there will be no value added tax (VAT) on school bus fees in the UAE.

According to the Federal Tax Authority (FTA), there is no VAT on “private and public school education (excluding higher education) and related goods and services provided by the education institution”.

According to Gulf News, an email sent to parents last week by School Transport Services (STS), which transports 72,000 students everyday on 1,800 buses for 65 schools in the UAE, said: “Our understanding is that the provision of School Transport Services (School Transport Fees) shall be exempt from VAT.”

Some of the schools in Dubai like the Indian High School (IHS) manage its own transport service, with a fleet of 165 school buses that transports more than 10,000 students every day to and from school.

Krishna Chaitanya, who is responsible for the implementation of VAT at IHS, told Gulf News that school bus transport comes under the “exempt” category of VAT in the UAE and the school will not be collecting VAT on school bus transport fees.

“However, operational and running costs such as fuel and spare parts of the school bus transport service will rise by 5%. The school will have to absorb the higher cost,” Chaitanya said.

VAT has been set at the rate of 5% in the UAE and will be implemented from 7:00AM on 1st January, 2018.

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