The following policy forms the guiding principle with respect to education services and educational material and it provides the comprehensive list of the educational materials that are zero rated.
Schedule 1, Paragraph (16) (a) of the Value-Added Tax (VAT) Act 81:05, zero-rates “a supply of educational services provided by private educational institutions”.
Prior to January 1, 2018, VAT registered private schools were required to charge VAT on the supply of educational services at the standard rate of VAT. However, with effect from January 1, 2018 VAT on educational services was introduced as a zero-rated supply.
Therefore, preschools, nursery, primary, secondary, technical (vocational), college, universities, educational and training school for the mentally handicapped or schools irrespective of the type of educational services provided will be zero-rated.
Additionally, Schedule I Paragraph (16)(b) of the Value-Added Tax (VAT) Act 81:05 zero-rates the following educational materials:
(i) Printed books, including children’s picture books, children’s drawing books, children’s story books, coloring books, instructional newspapers and newsletters, textbooks, dictionaries, atlases, music manuscripts, recipe books, religious books, novels, exercise books, notebooks (spiral and composition), graph books and graph paper;
(ii) Educational charts, alphabetical charts, numbers charts, maps, globes;
(iii) School supplies of student-use quality, including file paper (loose leaf ruled three-holed filler paper), crayons (wax and wooden), dividers and compasses for school use, erasers, chalk (white and colored), chalkboard erasers, hand pencil sharpeners, simple protractors used by students, scientific calculators only, rulers, pencils, student’s paints (whether in tablets, tubes, jars, bottles, sets or similar forms and packages), lunch kits, lunch packs, lunch bags and geometry sets; and
(iv) Educational robot kits.
Therefore, all of the above educational materials are zero-rated.
Magazines, pricelists, and directories are not zero rated and are therefore subject to VAT at the rate of fourteen percent (14%).
The term “school supplies of student-use quality” refers to materials used predominantly by students. For example, simple protractors that are used for drawing or measuring angles are categorized as a supply of student-use quality, and as such, are zero rated.
On the other hand, protractors such as dial protractors, digital protractors and magnetic angle locator protractors, which are used by professional architects and draftsmen, are subject to VAT at the rate of fourteen percent (14%).
Also, robotic educational kits such as Elenco Robotics, Thymio 2, Robotics Dream, Cubelets and Bioloid used in fostering learning in robotic engineering and science are zero-rated.
Notwithstanding those educational services and educational materials listed in the Schedule 1 as zero-rated, persons who supply these services and items are still required to register for VAT.
Registered businesses may file for a full refund of input tax credits on a monthly basis if the zero-rated items account for at least fifty percent (50%) of the amount of the taxable supplies pursuant to Section 35(5) of the VAT Act, Chapter 81:05.