A supply of healthcare services may only be zero-rated if the recipient of the supply is also the person who receives the treatment.
In this publication, the FTA has clarified its view that the healthcare service provider should provide services directly to the patient in order for that service to qualify for zero rating. If the patient and “recipient of supply” of healthcare service are two different persons, then the supply will be subject to VAT at 5%.
| Sl No. | Scenario | Transactions | VAT outcome |
| 1 | A doctor has contracted with a hospital to see patients who visit the hospital | Supply by doctor to hospital | 5% |
| Supply by hospital to patient | 0% | ||
| 2 | A hospital refers a patient to a laboratory for a medical test and the patient directly contracts with the laboratory | Supply by laboratory to patient | 0% |
| 3 | Hospital – A is required to perform a specialized procedure for its patient. Hospital – A contracts with hospital – B to perform the procedure. | Supply by hospital – B to hospital – A | 5% |
| Supply by hospital – A to patient | 0% |