Dubai VAT: The Dubai VAT is 5 Percent

11:17 pm  |  19.10.2021
Dubai VAT: The Dubai VAT is 5 Percent

Since January 1, 2018, the Dubai VAT of five percent has been introduced, which also has to be paid by tourists. Here you get useful information on what you need to know and which other taxes still have to be paid on site.

Information on Dubai VAT

The emirate was known as a tax haven for a long time. In the meantime, taxes are now being collected by the state because it needs more money. Billions of US dollars have been invested in infrastructure over the past few years. Surely you can imagine that this of course also costs a lot of money. The main revenue of Dubai is of course still the oil. Furthermore, there has been a focus on tourism for many years because the income from oil will not go on forever. Oil has made the emirate of Dubai a very rich country. But as already mentioned a lot has been built and that has to be paid for. Thus, taxes are now also levied there that have to be paid by locals and tourists.

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What is the VAT Rate?

Dubai Downtown with Burj Khalifa

If you buy something in Dubai you have to pay five percent. As is well known, the VAT rate there is 19 percent and that is significantly more. It certainly remains to be seen whether the tax rate will stay that way over the next few years or whether it will be increased. As a tourist, you always have to take into account Dubai when you buy something because there this tax rate is added. But it is always important that you take a close look at the invoice. That means you have to look at the invoice to see if the taxes were paid there.

Which Products Do You Pay the Tax On?

In principle on everything, you need for daily life. It doesn’t matter whether you buy groceries in a supermarket or something in a shopping mall. In principle, it’s easy to explain. If you buy a pair of trousers in the Dubai Mall for, for example, 200 dirhams then you have to pay 10 dirhams Dubai VAT. As already mentioned, taxes have to be factored into the final price. But the tax rate is very low and is not particularly significant. There are always offers where you can save even more money in the big malls. As everywhere in the world, you always have to look for bargains. It’s the same in Dubai. You can always shop very cheaply at the Dubai Shopping Festival. There it doesn’t matter whether you pay taxes. There then only the low prices count.

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Tourists Also Have to Pay the Tax

As already mentioned, this is completely independent of whether you are a tourist or a local. If you buy something then each person has to pay the Dubai VAT. Otherwise, this would not be fair if only certain people had to pay for it. The emirate of Dubai can finance new projects through the tax revenue and thus the tourists who vacation there also benefit from it. Nowadays, many well-known sights of Dubai are already accessible free of charge. This is the Dubai Fountain, for example, and it cost a lot of money to build there. In another city, you would have to pay admission for it.

What about the Bed Tax

The so-called bed tax (tourism dirham) was introduced back in 2014. Useful information can be found on our special page. However, this is completely independent of the Dubai VAT. Many tourists are always confused about this. This means that this must always be paid on-site when checking out at the hotel. Furthermore, the amount always depends on which hotel category you have booked. If you have booked a five-star luxury hotel then you have to pay more than in a three-star hotel. This amount has nothing to do with VAT at all. Furthermore, the bed tax has nothing to do with the tour operator. This cannot demand this from the guests.

Where do Taxes Have to be Paid?

Dubai Marina Panorama

The Dubai VAT must always be paid locally. Furthermore, this has always been factored in and as a consumer, you don’t have to do anything extra there. You have to pay what the dealer asks and their taxes are already included. A refund of taxes for tourists is not possible. It is always best to pay the amount in cash in the currency dirham. There are no additional costs for the tourists. However, if you pay with a credit card, the credit card company may still charge you fees.

VAT is the Same in All Emirates

An important question is certainly whether you have to pay taxes of five percent in the other emirates such as Abu Dhabi or Ras al Khaimah. You have to know that these were introduced for all the emirates of the United Arab Emirates. It doesn’t matter where you go on vacation and these always have to be paid for. It is also the case that other emirates have also introduced the bed tax. But this only has to be paid for by tourists.

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Always Ask for an Invoice

For example, if you buy something expensive in one of the numerous Dubai shopping malls then you always have to make sure that you get an invoice with declared VAT. There are always many vacationers who then have no bill. The customs will then estimate the value. But if you have an invoice you can prove exactly how much you paid in Dubai. However, in the Dubai souks, you usually don’t get a bill if you buy souvenirs there. As a rule, however, the amounts involved are always smaller.

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