VAT in the UAE is a single rate, but a restaurant bill still has several moving parts: the service charge, fees in some venues and the rounding at the end.
5%, inside the price
VAT is 5%, and prices shown to consumers must be VAT-inclusive. The bill shows the VAT contained in the total.
Service charge and fees come before VAT
A 10% service charge is common in UAE restaurants. It is added before VAT, so VAT is charged on it too. In Dubai, food and drink served in hotels also carries a 7% municipality fee, likewise added before VAT.
What a tax invoice must show
- The words "Tax Invoice"
- Your name, address and 15-digit TRN
- The date of issue and the date of supply
- Description, unit price, quantity and the VAT amount in AED
A simplified tax invoice is allowed for sales below AED 10,000, which covers most restaurant bills.
Rounding to 25 fils
Totals are commonly rounded to the nearest 25 fils. Show the round-off and book it, so the bills and the books agree.
Registration and corporate tax
Registration is compulsory above AED 375,000 of taxable supplies. A 9% corporate tax applies to profits above AED 375,000, so a P&L that is current all year, not assembled at year end, saves real time.
In Feazio, UAE restaurants get VAT-inclusive prices, a tax invoice with their TRN, the service charge added before VAT, totals rounded to 25 fils, and output and input VAT ready for each return, one per TRN. Try the free VAT calculator.
This is general information, not tax advice. Confirm with your tax adviser or the Federal Tax Authority.