Is life insurance VAT exempt in the UAE?

Yes. Life insurance is an exempt supply under UAE VAT law. FTA Directive No. 4 of 2026 extends the exemption to connected services and fees that are included within the insurance premium, provided the service is necessary for the insurance supply and no separate consideration is charged.

Are life insurance management fees VAT exempt in UAE?

Management fees can be VAT exempt if they are included within the insurance premium, are necessary for providing the life insurance supply, and no separate fee is charged. If billed separately, the FTA treats them as taxable independent supplies subject to 5% VAT.

What happens if an insurance service fee is charged separately in the UAE?

Under Clause 4 of FTA Directive No. 4 of 2026, services for which separate amounts are charged are independent supplies for UAE VAT purposes. This means 5% VAT applies, regardless of whether the service is related to the life insurance or reinsurance contract.

Does FTA Directive No. 4 of 2026 apply to life reinsurance contracts?

Yes. The directive expressly covers both life insurance and life reinsurance contracts. The same three-condition test applies to fees and charges relating to the management, operation, or execution of a life reinsurance contract.

How does the FTA determine VAT treatment for insurance service fees in UAE?

The FTA assesses each case on its facts, including the nature of the relationship between the service and the insurance contract, the necessity of the service, and how the consideration is charged. Billing structure — bundled in the premium vs charged separately — is often the decisive factor.