Are goods and services supplied to a qualifying educational institution ever not zero-rated?
Yes, there are supplies related to providing educational services which are subject to the standard VAT rate of 5%. A qualifying educational institution must charge and account for VAT for the following supplies:
- Goods and services supplied by a qualifying educational institution to persons who are not enrolled in the institution.
- Any goods other than educational materials that are provided by a qualifying educational institution and consumed or transformed by the students being taught.
- Uniforms or any other clothing which are required to be worn by students at a qualifying educational institution, irrespective of whether they are supplied by the institution as part of the supply of educational services.
- Electronic devices used in educational services, irrespective of whether they are supplied by a qualifying educational institution as part of the supply of educational services.
- Food and beverages supplied at a qualifying educational institution, including supplies from vending machines or vouchers for food and beverages.
- Field trips, unless they are directly related to the curriculum of an educational service and are not predominantly recreational.
- Extracurricular activities provided by or through a qualifying educational institution for a fee in addition to the fee for the education service.
- Membership in a student organisation.
Another exception to zero rating is the provision of school transportation, which falls under the category of domestic transportation and hence is exempt from VAT.