A company in the UAE that offers a zero-rated good
or service needs to register with the Federal Tax Authority (FTA).
An earlier statement from flydubai had said that zero-rated goods
and services include ticket fares, on-board products, and extras such as upgrades to Business Class, extra-legroom seats, and additional baggage.
The primary difference between zero rate and exempt supplies is that the vendors of zero-rated goods
and/or services can still reclaim all their input VAT.
Furthermore, title five discusses profit margins and explains how to calculate VAT based on profit margins, while title six addresses zero-rated goods
and services, including telecommunications, international transportation of passengers or goods, investment grade precious metals, new and converted residential buildings, as well as healthcare, education and buildings earmarked for charity.
Those in the zero-rated goods
and services category include certain medications and medical equipment specified by the Ministry of Health and Saudi Food and Drug Authority, supply of gold, silver and platinum that is for investment purposes - at least 99 per cent pure - and tradeable in the international bar market.
Drum explained that the difference between zero-rated and exempt tax is that suppliers of zero-rated goods
and services are eligible to reclaim their input VAT, whereas suppliers of exempt goods are unable to do so.