Hotel Tax Calculator – Universal Tool for Businessmen and Tourists

The UAE taxation system does not include the majority of generally accepted taxes for individuals and legal entities; for example, there is no income tax here. However, certain taxes are still levied. They are applied to companies working in the oil industry, as well as in the banking sector. As for the hotel and restaurant business and real estate market, here are the typical fees:

• There is a tax on rental housing – 5% of the cost of annual rent in the Emirate of Dubai.
• Tax on real estate transactions (purchase, sales) is 2% of the property value.
• Taxes on restaurants and hotels services are different in different Emirates. In Dubai, there is a standard rate of 10% of the cost of services.

Specific tax rates are regulated by the authorities of each Emirate, also, each free zone has its own rules, and in this regard, the UAE is not a country with uniform rules for all, and this must be taken into account when you open your business here in the hotel and restaurant sector.

As you can see, there are some features of taxation regarding hotels and real estate, so for correct and quick calculation of hotel tax, it is better to use a specialized tool – tax calculator, which contains all the necessary data.

Also, tax calculator will be useful for tourists who are going to calculate the hotel cost with tax when planning their trip to the UAE.

How to calculate hotel tax in the UAE?

How do they calculate service tax is in hotels? Most Emirates charge tax from 5% to 10% of the cost of hotel services and entertainment. Also, there may be tourist fees of up to 10% imposed on certain types of tourist or recreational activities (for example, events and shows). These taxes are imposed in each Emirate.

So, as we have already found out, there are taxes that are charged for the income of hotels and entertainment complexes in Dubai. Here the bills for hotel services include a standard fee – a tourist tax. The amount of this tax is calculated for one hotel room and depends on the class of the hotel. So far, for one room in a 3-star hotel, you will have to pay 10 dirhams, and 20 dirhams for a room in a 5-star hotel (prices are for the Emirate of Dubai.)

Dubai Emirate charges a 10% city tax on hotel income. Thus, every time you visit a hotel in Dubai or come to a restaurant, 10% is added to your bill. All the Emirates, except for Abu Dhabi, impose a rental income tax – a 10% city tax is levied on renting commercial real estate and 5% on renting residential real estate. Abu Dhabi does not levy a tax on rental income, but real estate owners must pay annual license fees. Taxes are also levied by DEWA (Dubai Electricity and Water Authority) for utility bills.

Although the UAE is considered to be a tax-free country, there are still some taxes here, in particular, those that relate to rent, buying and selling houses, as well as taxes on the hotel and restaurant business. How not to get stuck in the features of the local legislative rules and calculate your tax correctly? The answer is simple – use our hotel tax calculator. It was developed to take into account all the features of the local law, so you can easily use it to calculate your tax liability.