Article 34 of Cabinet Decision No. 52 of 2017 on the Executive Regulations of the Federal Decree-Law No. 8 of 2017 on Value Added Tax ("VAT Executive Regulations") states the means of transport which qualify for zero-rating under Clause 4 of Article 45 of the Federal Decree-Law No. 8 of 2017 on Value Added Tax ("VAT Law").
One such qualifying means of transport includes the supply of a bus or train that is designed or adapted to be used for public transportation of 10 or more passengers.
This Public Clarification shall discuss the definition of 'public transportation' and its interpretation for the purposes of identifying those buses or trains which qualify to be supplied at the zero rate under this provision.
For the avoidance of doubt, this Public Clarification impacts upon the VAT liability of the supply of the vehicles themselves, and does not affect the VAT liability of transportation services supplied under Clause 2 of Article 45 of the VAT Law (i.e. international transport of passengers and goods, which is zero-rated) or under Clause 4 of Article 46 of the VAT Law (i.e. local passenger transport...