Whilst Dubai is well-known as a tax-free earnings haven for many of its international expatriate workers, make no mistake there are many other taxes along the way!
In this tourist tax guide, we talk you through what sort of taxes you can expect to pay as a visitor to the UAE, how the 5% VAT introduced in 2018 works and refunds available to tourists.
Dubai Hotel Taxes
When you are booking a hotel online for Dubai it is VERY likely you are being quoted the gross price for just the hotel room, NOT the taxes, which are payable directly to the hotel.
These taxes on Dubai hotels have changed significantly over the years, but as at 2020 you can expect to pay:
- VAT 5%
- Municipality fee 7%
- Property service charge 10%
- “Tourism Dirham Fee” per room, per night 7 – 20 AED (varies depending on the grade of hotel, also called Hotel Tax or City Tax)
Dining taxes in Dubai
When you are dining in a hotel restaurant or ordering room service, you can also expect the following charges to be added to your dining bill:
- Service Charge
- Municipality fee
- VAT 5%
In restaurants not attached to a hotel, you should expect to only pay the 5% VAT.
You are not required as a restaurant customer to leave a tip in the UAE. Many will either round up or add 10-15% if they are happy with the service.
In a food court fast food outlet in Dubai you should expect to pay:
- Only the 5% VAT. This should be included in your quoted price.
Purchasing food in a supermarket
- All supermarket food is subject to the 5% VAT, there are no zero-rated food items.
What about alcohol in Dubai? Is it taxed?
As you might know, alcohol IS available for non-Muslims in Dubai from licensed outlets.
It comes at a cost though as “excise tax” (AKA Sin Tax) is added for the pleasure. You won’t see it as this excess is added at the importation stage of the sale process. As a consumer, you will only see a separate line item for the VAT, and any hotel service charges.
If you are consuming the drink in a bar or restaurant, municipality and service charges will apply as above. If you have a liquor license for home consumption (now also available for tourists), you will also pay another 30% tax at the retail stores in Dubai. As a consumer, you will only see the 5% VAT but this is included in the price you see on the shelf.
Other taxes and excises in Dubai
So as you’re starting to see there are no income taxes but plenty of indirect taxes to be wary of!
Again, you will not notice excise as a consumer as they are paid by the importing wholesaler but items such as carbonated drinks, energy drinks, sweetened drinks, tobacco and tobacco products also incur between 50-100% excise.
Dubai Tax Refund for Tourists Scheme
When VAT was first introduced in 2018, tourists still had to pay the full amount of VAT.
Since 18 November 2018, tourists only temporarily in the UAE can now apply for a VAT refund, operated by Planet, on behalf of the Federal Tax Authority. There are, of course, conditions:
- Goods must be purchased from a retailer who is participating in the ‘Tax Refund for Tourists Scheme’.
- Goods are not excluded from the Refund Scheme of the Federal Tax Authority.
- You must have the explicit intention to leave the UAE in 90 days from the date of supply, along with the purchased supplies.
- You must export the purchased goods out of the UAE within three months from the date of supply.
- The process of purchase and export of goods must be carried out according to the requirements and procedures determined by the Federal Tax Authority.
- Minimum spend 250 AED.
You can learn more about the Tax Refund for Tourists Scheme on the Planet website.
Before you go! Top Tips for planning your trip to Dubai
- Pop into our essential planning information page, it includes everything you need to know about getting around Dubai, a handy guide on what to pack and top tips for first-timers on the do’s and don’ts, laws and customs to be aware of.
- Pick up a Dubai Pass to save up to 50% on top Dubai attractions
- Don’t forget to pack your travel insurance!!!
- Discover the best areas to stay in Dubai, or bag a bargain on your accommodation here:
