Introduced: 2018
Standard Rate: 5%
Authority: Federal Tax Authority (FTA)

The UAE operates a modern VAT framework modelled broadly on European systems, but with local variations relevant to tourism.

Scope for Travel and Hospitality

• Accommodation (hotels, resorts, serviced apartments): taxable at 5% plus local municipality/tourism fees (differ by emirate).

• Hospitality services: F&B, events, banqueting, spa services, and resort fees are all taxable.

• Inbound travel packages: If the consumption occurs inside the UAE, VAT applies even when booked by non-UAE agents.

• Outbound services: Zero-rated if the customer is outside the UAE and the benefit is enjoyed outside the country.

Refunds for Foreign Businesses - See UAE VAT Reclaim

Refunds are available under the UAE Foreign Business Refund Scheme, but the conditions are strict:

• No fixed place of business or establishment in the UAE

• Not registered for VAT locally

• Must be legally established in a country that offers reciprocal refunds

• Must meet invoice and payment requirements

E-Invoicing Mandate (2026–2027)

A significant change for hotels and DMCs:

• Ministerial Decisions 243 & 244 (2025) introduce structured e-invoicing

• Phase 1: Large taxpayers (≥ AED 50m revenue)

• Phase 2: All remaining VAT-registered businesses

• Mandatory XML-based invoice format

• Real-time reporting to accredited platforms

• Hotels must integrate PMS, POS, and accounting systems before go-live

Antravia helps: UAE hotels and DMCs review invoicing systems, prepare for e-invoicing, and optimise refund claims for foreign event organisers.

Not sure where to start? Antravia free Consultation

Disclaimer:
Content published by Antravia is provided for informational purposes only and reflects research, industry analysis, and our professional perspective. It does not constitute legal, tax, or accounting advice. Regulations vary by jurisdiction, and individual circumstances differ. Readers should seek advice from a qualified professional before making decisions that could affect their business.
See also our Disclaimer page