A growing variety of foreign and local concepts in the restaurant industry have raised the level of competition in the Dubai restaurant sector. Ethnicities in food cultures bring together the hands over tastes and a wide variety of services. VAT is an indirect tax charged on goods and services from the point of origin to the point of consumption. VAT is generally applicable to restaurant or food bills. Restaurant services are required to charge VAT at 5% to its customers. As per the law, VAT is charged on all kinds of food services including Arabic, Continental, Chinese and other restaurants in. A business register for VAT if their annual turnover exceeds the threshold of AED 375,000 as per the current year. There exists an option for voluntary registration if there is a threshold of AED 187,500. The government of UAE and the Federal Tax Authority (FTA) defined this process of the threshold for registration and reporting of VAT.
* Restaurants are required to issue VAT invoices to customers when goods and services provided are more than AED 100,00.
* Restaurants can claim input tax on the expenses incurred for business purposes. The instances are the purchase of food items, rental expenses, delivery vehicles, equipment used in the kitchen for cooking, furniture and fixtures, stationery, office equipment.
* Restaurants must maintain all the business records and documents for a period of 5 years.
Introduction of VAT in UAE had made a huge impact on the restaurant sector it includes:
Restaurants are given two options of pricing in their menu. It includes:
In non-compliance, FTA issues a tax assessment with the tax payable within five business days of its issuance.
CDA VAT consultancy services in Dubai and UAE are tailor-made to meet the unique requirements of the customers. At CDA, we conduct an in-depth analysis to understand your business complexities extending from your services to accounting, taxation, auditing, and VAT services. Our VAT specialists having relevant industry-specific experience in taxation in compliance with international standards can help you successfully complete all your VAT activities without any fail.
CDA VAT experts on restaurant sectors help you with:
CDA serves a vast number of clients from the restaurant sector across the UAE. Our team is well experienced in providing VAT services for restaurants. We provide cost-effective value-added solutions to reduce Tax burdens meeting all your business needs. Our well-experienced team handles the Tax consultation and Tax auditing services at your ease with the highest level of professional ethics and quality.
The VAT rate is 5 percent on all goods and services in UAE other than some exemptions.
Tax exemptions in the UAE are for (1) financial services, (2) supply of residential buildings through sale or lease, (3) supply of bare land, (4) supply of local passenger transport.
Restaurants can claim input tax on the expenses incurred for business purposes. The instances are Purchase of Food items, Rental expenses, Delivery Vehicles, Equipment used in Kitchen for cooking, Furniture and Fixtures, Stationery, Office equipment.
The deadlines are clearly mentioned in the TRN certificate and it is monthly or quarterly based. The payment of due tax is on the 28th day of the tax period.
If you have raised a Tax Invoice we are liable to pay the VAT to the government, if the customers do not make the payment in future we can issue a Tax Credit Note and reclaim the amount we have paid in excess.
Our charges purely depend on the: transactions complexity, accounting software used and skill required.
At aggregate receipts of AED 1000 per day or above, the restaurant would be required to register with FTA.
Restaurants are given two options of pricing in their menu. It includes (1) VAT inclusive to the prices, (2) VAT exclusive by giving a footnote of 5% standard rate.
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