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May 15, 2026

This official FTA guide, VATGIN1, outlines the VAT treatment for the insurance sector in the UAE. It clarifies the application of VAT to various insurance and reinsurance services, establishing that most are subject to the standard rate. The guide details the specific exceptions, primarily the VAT exemption for life insurance and associated reinsurance under Article 42 of the Executive Regulations, and the zero-rating for insurance related to international transport under Article 33. It provides critical guidance for insurers on input tax recovery, including direct attribution and the standard apportionment method for businesses with mixed taxable and exempt supplies.

INSURANCE

VAT Guide | VATGIN1

September 2018

1. Insurance – Guidance Note

1.1. Overview
1. 1.1.1. Short brief
2. 1.1.2. Purpose of this document
3. 1.1.3. Who should read this document?

2. Insurance

2.1. Insurance - background
1. 2.1.1. What is Insurance?
2. 2.1.2. What is Reinsurance?
2.2. Insurance – the Law
1. 2.2.1. What is insurance as defined by the Law?
2. 2.2.2. Life insurance
3. 2.2.3. Insurance relating to the international transportation of passengers or goods

3. VAT

3.1 What is a supply subject to VAT?
1. 3.1.1 Standard rate
2. 3.1.2 Zero rate
3.2 What is an exempt supply?
3.3 Multiple supplies versus single composite supplies
1. 3.3.1 Multiple supplies
2. 3.3.2 Single composite supplies

4. Insurance and VAT

4.1. The VAT treatment of insurance and related services in the UAE
1. 4.1.1. General principle
2. 4.1.2. Standard rated services
3. 4.1.3. Exported services
4. 4.1.4. Imported Services
5. 4.1.5. Exemption
6. 4.1.6. Recovery of input tax
4.2. Islamic insurance – VAT treatment
1. 4.2.1 Principles
2. 4.2.2 Example
3. 4.2.3 Non-equivalent products
4.3. Transitional Provisions
1. 4.3.1. Contracts of insurance
4.4. Other insurance services – VAT treatment
1. 4.4.1. Health insurance
2. 4.4.2. Real estate insurance
3. 4.4.3. Agents
4. 4.4.4. Insurance companies – recovery of claims costs

5. Input tax apportionment methods

5.1 General approach for all methods
1. 5.1.1 Fair and reasonable test
2. 5.1.2 Step 1: Direct attribution
3. 5.1.3 Step 2:Standard method - attribution of residual input tax

Appendix A

VAT treatment of insurance charges

Insurance – Guidance Note

Overview

Short brief

VAT was introduced with effect from 1 January 2018 in the UAE. As a general consumption tax on the supply of goods and services, its effects must be understood by providers of insurance and related services in the UAE, in two contexts:

Its application to the activities of all providers of insurance and related services; and
The approach providers of insurance and related services in the UAE should take to determine the amount of VAT on costs (i.e. input tax) they are eligible to reclaim where they make both taxable and exempt services of insurance and related services.

Purpose of this document

This document contains guidance about the characteristics of insurance and related services for VAT purposes.

Contents

Insurance – Guidance Note

Overview

Short brief

Purpose of this document