Every restaurant owner and F&B operator in the UAE must understand one fundamental rule: prepared food and beverage is a standard-rated supply subject to 5% VAT — full stop. Whether you run a fine-dining concept in DIFC, a casual café in Jumeirah, or a cloud kitchen dispatching orders through Talabat, the same rate applies. Getting this wrong exposes your business to backdated VAT, AED 10,000 registration penalties, and FTA audit risk. This guide distils the Federal Tax Authority’s rules into a practical compliance framework your finance team can act on today.
How UAE VAT Applies to Restaurant Food and Beverage
All restaurant food and beverage sales — whether dine-in, takeaway, or delivery — are subject to the standard 5% UAE VAT rate. Zero-rating applies only to basic unprocessed foodstuffs such as fresh fruits, vegetables, bread, rice, and flour purchased at retail, not to any meal prepared and served by a restaurant.
This distinction catches many new operators off-guard. Even if your kitchen uses zero-rated raw ingredients — flour for your bread, fresh vegetables for your salad — the moment those ingredients are transformed into a prepared meal and sold to a customer, the supply becomes standard-rated. The FTA’s position is clear: the nature of the supply at the point of sale determines the VAT treatment, not the composition of the ingredients used to produce it.
This applies equally to dine-in covers, takeaway orders packed in branded bags, and meals dispatched through delivery aggregators. There is no reduced rate for food, no exemption for fast food, and no special treatment for healthy or dietary meals. If a restaurant prepares it and a customer pays for it, 5% VAT applies.
For operators planning their launch, understanding tax obligations from day one is a core part of our F&B business setup package — avoiding costly compliance gaps before the first cover is served.
VAT Registration Thresholds for Restaurants
Restaurants must register for VAT when annual taxable supplies exceed AED 375,000. Voluntary registration is permitted once supplies exceed AED 187,500, and registering early allows recovery of input VAT on startup costs such as fit-out and equipment.
The mandatory threshold of AED 375,000 is assessed on a rolling 12-month basis. If your taxable turnover in the preceding 12 months has crossed this figure, or if you reasonably anticipate crossing it in the next 30 days, registration is legally required. The FTA levies a fixed penalty of AED 10,000 for late registration, plus any backdated VAT that should have been collected and remitted during the unregistered period.
For multi-outlet restaurant groups, the threshold is calculated on combined turnover across all outlets, not per-location. A group with three branches each generating AED 150,000 per year has a combined taxable turnover of AED 450,000 and must register, even though no single outlet crosses the threshold in isolation.
Foreign businesses establishing restaurant operations in the UAE face no registration threshold at all — they must register for VAT regardless of turnover, from the first taxable supply. If you are a foreign investor exploring UAE market entry, the cost to open a restaurant in Dubai guide outlines total investment benchmarks, including the regulatory setup costs you should budget for.
Voluntary registration at AED 187,500 is strongly advisable for any restaurant in fit-out or pre-opening phase. Capital expenditure on kitchen equipment, furniture, interior fit-out, and POS systems generates recoverable input VAT. Without a VAT registration, this VAT is a sunk cost.
Service Charge, Tips, and Other Fees
A mandatory service charge levied by hotel restaurants and licensed F&B venues is subject to 5% VAT — VAT is calculated on the combined total of the food subtotal plus the service charge. Voluntary tips left by customers are not subject to VAT.
Calculating VAT on a Service-Charge Bill
Hotel restaurants and licensed establishments in the UAE typically apply a mandatory 10% service charge. The critical compliance point is that VAT is applied to the combined subtotal — food plus service charge — not to the food amount alone. The following table illustrates the correct calculation:
| Line Item |
Amount (AED) |
| Food and beverages |
100.00 |
| Service charge (10%) |
10.00 |
| Subtotal |
110.00 |
| VAT at 5% (on AED 110.00) |
5.50 |
| Total payable |
115.50 |
A common mistake is calculating VAT only on the AED 100 food amount, which produces AED 5.00 instead of the correct AED 5.50. Over thousands of covers per month, this discrepancy creates a material under-declaration of output VAT.
Standalone restaurants that do not apply a service charge face no such complexity — only 5% VAT on the food and beverage total applies.
Dubai Municipality Fee and Tourism Dirham
The Dubai Municipality fee — currently approximately 3.5% (reduced from the previous 7%) — applies to hotel and hospitality F&B operations, not to standalone restaurants. It is not subject to additional VAT layering. The Tourism Dirham is a per-room, per-night hotel fee that does not apply to restaurants and is not subject to VAT.
Tips and Gratuities
Voluntary tips or gratuities left by customers — whether added to the card payment or left in cash — are not consideration for a supply of goods or services by the restaurant. They are therefore outside the scope of VAT and must not be included in the VAT calculation. The key distinction from a service charge is voluntariness: a mandatory charge is contractual consideration; a voluntary tip is a gift.
Tax Invoices: What Your POS Must Produce
Every VAT-registered restaurant must issue a compliant tax invoice for every sale. The format depends on the transaction value and the customer type.
Full Tax Invoice (B2B and Catering)
For business-to-business supplies, corporate catering contracts, and any transaction where the customer requests a full tax invoice, the document must include the supplier’s Tax Registration Number (TRN), a unique sequential invoice number, the invoice date (issued within 14 days of the supply date), a description of the goods or services, the net amount, the VAT amount stated separately, and the total amount inclusive of VAT. Missing any of these elements renders the invoice non-compliant and prevents the recipient from recovering input VAT.
Simplified Tax Invoice (B2C up to AED 10,000)
For retail customer-facing transactions not exceeding AED 10,000, a simplified tax invoice is permitted. It must be labelled "Tax Invoice", display the supplier name and TRN, include the date and a unique reference number, describe the supply, and show the total amount inclusive of VAT. Most modern POS systems generate this format automatically, but restaurant operators must verify their system is correctly configured — a receipt that merely shows a total with a 5% note without the TRN is not FTA-compliant.
E-Invoicing
E-invoicing in the UAE is currently voluntary and is expected to become mandatory from January 2027 for businesses with annual revenue of AED 50 million or more. Businesses below this threshold should begin planning now. All tax invoices — paper or electronic — must be retained for a minimum of five years.
Our restaurant bookkeeping services include POS compliance reviews to ensure every receipt your system generates meets FTA tax invoice requirements.
Food Delivery Platforms and VAT
All food delivery sales — whether through Talabat, Deliveroo, Careem, or any other aggregator platform — are subject to 5% VAT, identical to dine-in and takeaway sales. The restaurant is responsible for accounting for and remitting output VAT on the full food price.
Platform commission fees charged by aggregators are input-VAT-recoverable for the restaurant, provided the aggregator issues a compliant tax invoice. Restaurants operating on aggregator platforms must ensure their agreements and the invoices they receive from the platform include all required tax invoice details and are issued against the aggregator’s valid UAE TRN.
Delivery fees charged to end customers through the platform are also taxable supplies. Whether the delivery fee is collected by the restaurant or by the platform on the restaurant’s behalf, the output VAT obligation follows the economic reality of who is making the supply. Restaurants should confirm this treatment with their aggregator and tax agent to ensure there is no double-counting or omission in their VAT returns.
Under-reporting aggregator delivery sales is one of the eight most common VAT mistakes UAE restaurants make — and it is an area the FTA actively scrutinizes during audits.
Input VAT Recovery: What You Can and Cannot Claim
VAT-registered restaurants can recover input VAT on costs that are used for making taxable supplies. A broad range of restaurant expenditure qualifies.
Recoverable Input VAT
The following categories of expenditure are fully recoverable, provided a compliant tax invoice is held:
- Kitchen equipment and appliances
- Interior fit-out and renovation
- Furniture, fixtures, and fittings
- POS systems and technology infrastructure
- Food ingredients and beverages for resale
- Rent and service charges on commercial premises
- Utilities (electricity, water, gas)
- Cleaning and sanitation services
- Accounting and legal fees
- Aggregator platform commission fees (if properly invoiced)
- Delivery vehicle costs
- Packaging materials
The 2026 FTA amendment introduced an additional requirement: restaurants must verify the legitimacy of their supply chain, not simply hold a valid-looking tax invoice. If your supplier is later found to have been involved in VAT fraud, holding their invoice may not protect your input VAT claim. Due diligence on supplier TRN validity — which can be checked on the FTA portal — is now a compliance expectation, not just best practice.
Blocked and Restricted Input VAT
Entertainment expenses are explicitly blocked from input VAT recovery under UAE VAT law. This is a meaningful restriction for restaurants that host corporate entertainment events. Where a restaurant is both a venue for its own customers and a provider of private dining or event services, it is important to segregate costs correctly.
Complimentary meals provided to staff or customers require careful treatment. Where a meal is provided free of charge and input VAT was recovered on the ingredients or cost of that meal, a deemed supply may arise — meaning the restaurant is required to account for output VAT as if it had made a sale at market value. Businesses with significant staff meal programs should obtain specific guidance on their deemed supply obligations.
For restaurants that are in their fit-out phase, our restaurant bank account opening service can be paired with early VAT registration to ensure all pre-opening capital expenditure is tracked and recoverable from the first VAT return.
VAT Return Filing: Deadlines and Penalties
Most UAE restaurants file quarterly VAT returns. The return must be submitted, and any VAT payable must be settled, within 28 days of the end of the tax period.
Quarterly Filing Calendar
| Tax Period |
Period End |
Filing and Payment Deadline |
| Q1 (January – March) |
31 March |
28 April |
| Q2 (April – June) |
30 June |
28 July |
| Q3 (July – September) |
30 September |
28 October |
| Q4 (October – December) |
31 December |
28 January (following year) |
Restaurants with annual taxable turnover exceeding AED 150 million are assigned to monthly filing by the FTA. Monthly filers follow the same 28-day post-period rule for each calendar month.
An important compliance note: VAT returns must be filed even if no VAT is payable for the period — for example, in a period where input VAT credits exceed output VAT. Failure to file is a separate offence from failure to pay.
Late Filing Penalties
Under Cabinet Decision No. 129 of 2025, effective from April 2026, late filing penalties are AED 1,000 for a first offence and AED 2,000 for a repeat offence within any 24-month window. These penalties apply per return, not per day, so a single missed deadline costs AED 1,000 — but a pattern of late filing quickly accumulates.
Late payment of VAT due carries a separate penalty of 2% of the unpaid tax due immediately, 4% if still unpaid after seven days, and a monthly 1% penalty thereafter. For a restaurant with significant output VAT obligations, the cost of missing a payment deadline is material.
Our restaurant VAT and corporate tax services include return preparation, deadline management, and FTA correspondence — removing the compliance burden from operations teams entirely.
Eight Common VAT Mistakes UAE Restaurants Make
Understanding the rules is only half the battle. These are the most frequent compliance failures the FTA encounters in restaurant audits:
- Late VAT registration: Crossing AED 375,000 in taxable turnover without registering triggers a AED 10,000 fixed penalty plus backdated VAT on all sales made during the unregistered period.
- Charging VAT on tips: Voluntary gratuities are outside the scope of VAT. Including them in the VAT base overcharges customers and creates an incorrect output VAT liability.
- Non-compliant POS systems: POS systems that generate receipts without the TRN, without a unique invoice number, or without the VAT amount stated separately do not produce valid tax invoices. Customers cannot recover input VAT from these documents.
- Claiming input VAT without a compliant invoice: Input VAT recovery requires a tax invoice that meets all FTA requirements. An informal receipt or bank statement entry is not sufficient.
- Miscalculating VAT on service charges: As shown in the table above, VAT must be applied to the combined food-plus-service-charge subtotal, not the food amount alone.
- Under-reporting delivery platform sales: All aggregator-platform sales generate output VAT obligations. Omitting or under-declaring these sales creates discrepancies between the restaurant’s VAT return and data the FTA can obtain from the platforms.
- Ignoring deemed supply on complimentary meals: Free meals provided to staff or loyal customers may trigger output VAT obligations where input VAT was previously recovered on those costs.
- Missing filing deadlines: Even one missed quarterly return incurs an AED 1,000 penalty. Restaurants should implement calendar reminders and automated VAT return workflows to eliminate this easily avoidable cost.
Frequently Asked Questions
Is takeaway food VAT-exempt in the UAE?
No. Takeaway food from a restaurant is subject to the standard 5% UAE VAT rate. The zero-rating that applies to basic foodstuffs covers only unprocessed items such as fresh fruits, vegetables, bread, flour, and rice purchased as raw ingredients. Once a restaurant prepares and packages a meal for takeaway, it is a standard-rated supply regardless of format, packaging, or ingredients used.
What is the VAT registration threshold for restaurants?
The mandatory VAT registration threshold is AED 375,000 in annual taxable supplies, assessed on the preceding 12 months or anticipated next 30 days. Voluntary registration is permitted once taxable supplies exceed AED 187,500. For restaurant groups with multiple outlets, total combined turnover across all locations counts toward the threshold. Foreign businesses have no threshold and must register from their first taxable supply in the UAE. Late registration carries a fixed penalty of AED 10,000.
Does VAT apply to the service charge?
Yes. A mandatory service charge — typically 10% in hotel restaurants and licensed F&B venues — is treated as part of the consideration for the supply and is included in the VAT base. VAT at 5% is applied to the combined total of the food and beverage amount plus the service charge, not to the food amount alone. Voluntary tips left by customers are different: they are not consideration for a supply and are not subject to VAT.
Can I recover VAT on restaurant fit-out costs?
Yes, provided you are VAT-registered and hold a compliant tax invoice from the contractor or supplier. Fit-out and renovation, kitchen equipment, furniture, POS systems, and other capital expenditure used for making taxable restaurant supplies are fully recoverable as input VAT. This is a significant reason to register voluntarily at AED 187,500 during pre-opening — registering only after opening means all pre-opening VAT on fit-out is lost. Complimentary or entertainment-related costs are blocked from recovery.
Disclaimer: This article provides general information only and does not constitute tax advice. Consult a UAE-registered tax agent for guidance specific to your business.
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Every restaurant owner and F&B operator in the UAE must understand one fundamental rule: prepared food and beverage is a standard-rated supply subject to 5% VAT — full stop. Whether you run a fine-dining concept in DIFC, a casual café in Jumeirah, or a cloud kitchen dispatching orders through Talabat, the same rate applies. Getting this wrong exposes your business to backdated VAT, AED 10,000 registration penalties, and FTA audit risk. This guide distils the Federal Tax Authority’s rules into a practical compliance framework your finance team can act on today.
How UAE VAT Applies to Restaurant Food and Beverage
All restaurant food and beverage sales — whether dine-in, takeaway, or delivery — are subject to the standard 5% UAE VAT rate. Zero-rating applies only to basic unprocessed foodstuffs such as fresh fruits, vegetables, bread, rice, and flour purchased at retail, not to any meal prepared and served by a restaurant.
This distinction catches many new operators off-guard. Even if your kitchen uses zero-rated raw ingredients — flour for your bread, fresh vegetables for your salad — the moment those ingredients are transformed into a prepared meal and sold to a customer, the supply becomes standard-rated. The FTA’s position is clear: the nature of the supply at the point of sale determines the VAT treatment, not the composition of the ingredients used to produce it.
This applies equally to dine-in covers, takeaway orders packed in branded bags, and meals dispatched through delivery aggregators. There is no reduced rate for food, no exemption for fast food, and no special treatment for healthy or dietary meals. If a restaurant prepares it and a customer pays for it, 5% VAT applies.
For operators planning their launch, understanding tax obligations from day one is a core part of our F&B business setup package — avoiding costly compliance gaps before the first cover is served.
VAT Registration Thresholds for Restaurants
Restaurants must register for VAT when annual taxable supplies exceed AED 375,000. Voluntary registration is permitted once supplies exceed AED 187,500, and registering early allows recovery of input VAT on startup costs such as fit-out and equipment.
The mandatory threshold of AED 375,000 is assessed on a rolling 12-month basis. If your taxable turnover in the preceding 12 months has crossed this figure, or if you reasonably anticipate crossing it in the next 30 days, registration is legally required. The FTA levies a fixed penalty of AED 10,000 for late registration, plus any backdated VAT that should have been collected and remitted during the unregistered period.
For multi-outlet restaurant groups, the threshold is calculated on combined turnover across all outlets, not per-location. A group with three branches each generating AED 150,000 per year has a combined taxable turnover of AED 450,000 and must register, even though no single outlet crosses the threshold in isolation.
Foreign businesses establishing restaurant operations in the UAE face no registration threshold at all — they must register for VAT regardless of turnover, from the first taxable supply. If you are a foreign investor exploring UAE market entry, the cost to open a restaurant in Dubai guide outlines total investment benchmarks, including the regulatory setup costs you should budget for.
Voluntary registration at AED 187,500 is strongly advisable for any restaurant in fit-out or pre-opening phase. Capital expenditure on kitchen equipment, furniture, interior fit-out, and POS systems generates recoverable input VAT. Without a VAT registration, this VAT is a sunk cost.
Service Charge, Tips, and Other Fees
A mandatory service charge levied by hotel restaurants and licensed F&B venues is subject to 5% VAT — VAT is calculated on the combined total of the food subtotal plus the service charge. Voluntary tips left by customers are not subject to VAT.
Calculating VAT on a Service-Charge Bill
Hotel restaurants and licensed establishments in the UAE typically apply a mandatory 10% service charge. The critical compliance point is that VAT is applied to the combined subtotal — food plus service charge — not to the food amount alone. The following table illustrates the correct calculation:
A common mistake is calculating VAT only on the AED 100 food amount, which produces AED 5.00 instead of the correct AED 5.50. Over thousands of covers per month, this discrepancy creates a material under-declaration of output VAT.
Standalone restaurants that do not apply a service charge face no such complexity — only 5% VAT on the food and beverage total applies.
Dubai Municipality Fee and Tourism Dirham
The Dubai Municipality fee — currently approximately 3.5% (reduced from the previous 7%) — applies to hotel and hospitality F&B operations, not to standalone restaurants. It is not subject to additional VAT layering. The Tourism Dirham is a per-room, per-night hotel fee that does not apply to restaurants and is not subject to VAT.
Tips and Gratuities
Voluntary tips or gratuities left by customers — whether added to the card payment or left in cash — are not consideration for a supply of goods or services by the restaurant. They are therefore outside the scope of VAT and must not be included in the VAT calculation. The key distinction from a service charge is voluntariness: a mandatory charge is contractual consideration; a voluntary tip is a gift.
Tax Invoices: What Your POS Must Produce
Every VAT-registered restaurant must issue a compliant tax invoice for every sale. The format depends on the transaction value and the customer type.
Full Tax Invoice (B2B and Catering)
For business-to-business supplies, corporate catering contracts, and any transaction where the customer requests a full tax invoice, the document must include the supplier’s Tax Registration Number (TRN), a unique sequential invoice number, the invoice date (issued within 14 days of the supply date), a description of the goods or services, the net amount, the VAT amount stated separately, and the total amount inclusive of VAT. Missing any of these elements renders the invoice non-compliant and prevents the recipient from recovering input VAT.
Simplified Tax Invoice (B2C up to AED 10,000)
For retail customer-facing transactions not exceeding AED 10,000, a simplified tax invoice is permitted. It must be labelled "Tax Invoice", display the supplier name and TRN, include the date and a unique reference number, describe the supply, and show the total amount inclusive of VAT. Most modern POS systems generate this format automatically, but restaurant operators must verify their system is correctly configured — a receipt that merely shows a total with a 5% note without the TRN is not FTA-compliant.
E-Invoicing
E-invoicing in the UAE is currently voluntary and is expected to become mandatory from January 2027 for businesses with annual revenue of AED 50 million or more. Businesses below this threshold should begin planning now. All tax invoices — paper or electronic — must be retained for a minimum of five years.
Our restaurant bookkeeping services include POS compliance reviews to ensure every receipt your system generates meets FTA tax invoice requirements.
Food Delivery Platforms and VAT
All food delivery sales — whether through Talabat, Deliveroo, Careem, or any other aggregator platform — are subject to 5% VAT, identical to dine-in and takeaway sales. The restaurant is responsible for accounting for and remitting output VAT on the full food price.
Platform commission fees charged by aggregators are input-VAT-recoverable for the restaurant, provided the aggregator issues a compliant tax invoice. Restaurants operating on aggregator platforms must ensure their agreements and the invoices they receive from the platform include all required tax invoice details and are issued against the aggregator’s valid UAE TRN.
Delivery fees charged to end customers through the platform are also taxable supplies. Whether the delivery fee is collected by the restaurant or by the platform on the restaurant’s behalf, the output VAT obligation follows the economic reality of who is making the supply. Restaurants should confirm this treatment with their aggregator and tax agent to ensure there is no double-counting or omission in their VAT returns.
Under-reporting aggregator delivery sales is one of the eight most common VAT mistakes UAE restaurants make — and it is an area the FTA actively scrutinizes during audits.
Input VAT Recovery: What You Can and Cannot Claim
VAT-registered restaurants can recover input VAT on costs that are used for making taxable supplies. A broad range of restaurant expenditure qualifies.
Recoverable Input VAT
The following categories of expenditure are fully recoverable, provided a compliant tax invoice is held:
The 2026 FTA amendment introduced an additional requirement: restaurants must verify the legitimacy of their supply chain, not simply hold a valid-looking tax invoice. If your supplier is later found to have been involved in VAT fraud, holding their invoice may not protect your input VAT claim. Due diligence on supplier TRN validity — which can be checked on the FTA portal — is now a compliance expectation, not just best practice.
Blocked and Restricted Input VAT
Entertainment expenses are explicitly blocked from input VAT recovery under UAE VAT law. This is a meaningful restriction for restaurants that host corporate entertainment events. Where a restaurant is both a venue for its own customers and a provider of private dining or event services, it is important to segregate costs correctly.
Complimentary meals provided to staff or customers require careful treatment. Where a meal is provided free of charge and input VAT was recovered on the ingredients or cost of that meal, a deemed supply may arise — meaning the restaurant is required to account for output VAT as if it had made a sale at market value. Businesses with significant staff meal programs should obtain specific guidance on their deemed supply obligations.
For restaurants that are in their fit-out phase, our restaurant bank account opening service can be paired with early VAT registration to ensure all pre-opening capital expenditure is tracked and recoverable from the first VAT return.
VAT Return Filing: Deadlines and Penalties
Most UAE restaurants file quarterly VAT returns. The return must be submitted, and any VAT payable must be settled, within 28 days of the end of the tax period.
Quarterly Filing Calendar
Restaurants with annual taxable turnover exceeding AED 150 million are assigned to monthly filing by the FTA. Monthly filers follow the same 28-day post-period rule for each calendar month.
An important compliance note: VAT returns must be filed even if no VAT is payable for the period — for example, in a period where input VAT credits exceed output VAT. Failure to file is a separate offence from failure to pay.
Late Filing Penalties
Under Cabinet Decision No. 129 of 2025, effective from April 2026, late filing penalties are AED 1,000 for a first offence and AED 2,000 for a repeat offence within any 24-month window. These penalties apply per return, not per day, so a single missed deadline costs AED 1,000 — but a pattern of late filing quickly accumulates.
Late payment of VAT due carries a separate penalty of 2% of the unpaid tax due immediately, 4% if still unpaid after seven days, and a monthly 1% penalty thereafter. For a restaurant with significant output VAT obligations, the cost of missing a payment deadline is material.
Our restaurant VAT and corporate tax services include return preparation, deadline management, and FTA correspondence — removing the compliance burden from operations teams entirely.
Eight Common VAT Mistakes UAE Restaurants Make
Understanding the rules is only half the battle. These are the most frequent compliance failures the FTA encounters in restaurant audits:
Frequently Asked Questions
Is takeaway food VAT-exempt in the UAE?
No. Takeaway food from a restaurant is subject to the standard 5% UAE VAT rate. The zero-rating that applies to basic foodstuffs covers only unprocessed items such as fresh fruits, vegetables, bread, flour, and rice purchased as raw ingredients. Once a restaurant prepares and packages a meal for takeaway, it is a standard-rated supply regardless of format, packaging, or ingredients used.
What is the VAT registration threshold for restaurants?
The mandatory VAT registration threshold is AED 375,000 in annual taxable supplies, assessed on the preceding 12 months or anticipated next 30 days. Voluntary registration is permitted once taxable supplies exceed AED 187,500. For restaurant groups with multiple outlets, total combined turnover across all locations counts toward the threshold. Foreign businesses have no threshold and must register from their first taxable supply in the UAE. Late registration carries a fixed penalty of AED 10,000.
Does VAT apply to the service charge?
Yes. A mandatory service charge — typically 10% in hotel restaurants and licensed F&B venues — is treated as part of the consideration for the supply and is included in the VAT base. VAT at 5% is applied to the combined total of the food and beverage amount plus the service charge, not to the food amount alone. Voluntary tips left by customers are different: they are not consideration for a supply and are not subject to VAT.
Can I recover VAT on restaurant fit-out costs?
Yes, provided you are VAT-registered and hold a compliant tax invoice from the contractor or supplier. Fit-out and renovation, kitchen equipment, furniture, POS systems, and other capital expenditure used for making taxable restaurant supplies are fully recoverable as input VAT. This is a significant reason to register voluntarily at AED 187,500 during pre-opening — registering only after opening means all pre-opening VAT on fit-out is lost. Complimentary or entertainment-related costs are blocked from recovery.
Disclaimer: This article provides general information only and does not constitute tax advice. Consult a UAE-registered tax agent for guidance specific to your business.