VAT Faq's

1. Q: What will the 5% VAT be charged on?

E.g: Below table is indicative room charge for 5 star hotel

Description Room Rate + Service Charge
Room Rate 1,000
10% Municipality Fee 100
10% Service Charge 100
Gross room rate 1,200
Tourism Dirham 20
Sub-Total 1,220
5 % VAT 1100 x 5% = 55
Grand Total 1,275
A: VAT will be applied on Room rate + service charge as demonstrated in the above table.

2. Q: Is VAT charged on customs duties?

A: VAT will be charged on the final amount including custom duties. Import VAT can be recovered as per the VAT regulations.

3. Q: Will VAT be applied on payments received in 2017 for 2018 bookings?

A: Any bookings for supply of goods and services to be delivered in 2018 will be subject to VAT. VAT will also be applicable on long term stays in 2018 (and onwards) whether or not the contract was signed prior to the issue or implementation of the law. Please refer to article (70) of the Cabinet Decision No.

(52) of 2017 on the Executive Regulations of the Federal Decree-Law No (8) of 2017 on Value Added Tax.

By way of an example, VAT will be applicable in the following scenarios:

a. Reservations made for 2018 before the official VAT announcement.

b. Reservations made for 2018 after VAT announcement.

c. Long term stay guests before VAT announcement continuing their stay in 2018.

4. Q: In cases where some units are owned and leased out by non-licensed persons, how is VAT going to be charged?

A: VAT will be charged in the same manner as a licensed business/person. Any business/person having taxable supplies over AED 375,000 over the last 12 months should register and account for VAT on all supplies after registration, even if the person is not duly licensed to conduct activity.

5. Q: Is VAT applicable to below services?

a. Tourist Visa. The Tourist Visa fee will be subject to a cabinet decision on Government fees. However, any third party services relating to processing and issuance of tourist visas are subject to VAT.
b. Local private transport (Hotel transportation for guests). This follows the Exempt rule, so the customer shall not be charged VAT, except as otherwise set out in article (45) of the Cabinet Decision No. (52) of 2017 on the Executive Regulations of the Federal Decree-Law No (8) of 2017 on Value Added Tax
c. Complimentary services. If a complimentary service is funded by the Hotel and is provided to the guest without any consideration, then it is not taxable. Please refer to article (28) of the Cabinet Decision No. (52) of 2017 on the Executive Regulations of the Federal Decree-Law No (8) of 2017 on Value Added Tax
d. No show and cancelled bookings.are taxable so long as funds have been received by the hotel.
e. House Use (Rooms used by hotel staff for free). VAT on house-use depends on the details of the nature of accommodation provided. Please refer to article (53) of the Cabinet Decision No. (52) of 2017 on the Executive Regulations of the Federal Decree-Law No (8) of 2017 on Value Added Tax
f. Rebate/discount.The price of goods and services may be reduced by the value of the discount and then VAT will be applied to the post discount rate. Please refer to article (28) of the Cabinet Decision No. (52) of 2017 on the Executive Regulations of the Federal Decree-Law No (8) of 2017 on Value Added Tax
g. Redemption of Loyalty points /Rewards.This is typically taxable but dependent on the nature of the loyalty program, whether the reward points have been purchased or granted for no consideration.
h. Sales Offers for Free night stays (e.g. Pay for 2 nights stay for 3). The price of goods and services may be reduced by the value of the discount. Please refer to article (28) of the Cabinet Decision No. (52) of 2017 on the Executive Regulations of the Federal Decree-Law No (8) of 2017 on Value Added Tax
i. Reservations from Government entities.Taxable.
j. Barter agreement. Taxable at the market value of the goods or services. Please refer to article (25) of the Cabinet Decision No. (52) of 2017 on the Executive Regulations of the Federal Decree-Law No (8) of 2017 on Value Added Tax.
k. Outsourced staff/ Shared services.Taxable.
l. FOC Items (Free of Charge). Similar treatment as rebates, discounts and complimentary. Depends on the nature of the FOC and how it has been granted. Please refer to article (28) of the Cabinet Decision No. (52) of 2017 on the Executive Regulations of the Federal Decree-Law No (8) of 2017 on Value Added Tax
m. Incentives/Commission to third party (Local and overseas).Taxable.
n. Security Services/ Valet/Contract staff. Taxable.
o. Housekeeping / Engineering/Catering services to the leased outlets inside the hotels. Taxable.

6. Q: Is VAT applicable on advance payments immediately or at the time the service is availed?

A: VAT will be applicable on advance payments immediately. As an exception, VAT on advance payments received in 2017 for 2018 bookings will be payable in 2018. Please refer to article (25&26) of the Federal Decree-Law No. (8) of 2017 on Value Added Tax

7. Q: Is VAT applicable on refundable deposits?

A: If a deposit is completely refundable, it is not subject to VAT. If there is any administration fee included in the refund, the administration fee is taxable.

8. Q: Is VAT applicable on MICE businesses?

A: MICE businesses are subject to VAT, however a refund scheme for foreign businesses is detailed at article (67) of the Cabinet Decision No. (52) of 2017 on the Executive Regulations of the Federal Decree-Law No (8) of 2017 on Value Added Tax

9. Q: Implication of VAT on 1St January 2018 for Hotel

On New Year's Eve 31-Dec-2017, hotels will be operating beyond midnight and as such bills will be produced during early hours of 1-Jan-2018. Are these charges subject to VAT?

A: VAT shall be applicable at the earlier of:

a.The time of opening of the business on 1 January 2018.

b.7AM on 1 January 2018.

10. Q: Is VAT applicable on long term leases? In light of residential leases being exempt from VAT, how are hotel leases going to be treated?

A: Stays in hotels are taxable irrespective of length of stay

11. Q: In cases when goods and services are supplied on a daily basis, but invoicing is done on a quarterly basis, when is VAT recorded? At the time of issuing the invoice or monthly?

A: At the time of issuing the invoice. Please refer to article (25&26) of the Federal Decree-Law No (8) of 2017 on Value Added Tax.

12. Q: Is it mandatory to mention the VAT registration number on the invoices/pro-forma/quotation?

A: Tax Registration Number has to be mentioned on invoices for all registrants.

Q: Integration of VAT software with Hotel PMS & Back office

As per the VAT regulations every establishment has to purchase the VAT software approved by the FTA and to be linked with back office (accounting software). As the Hotels are using two systems (E.g Opera(Front office) & Sun system (Back office),In this case which one to be linked (Opera shows full transactions and the back office shows the summary).

A: DTCM will update the industry as soon as further information has been in relation to the software integration.

13. Q: Clarity on payment cycle & method, as well as list of violations.

A: Payment cycle is dependent on Tax periods which are allocated to each entity as per its turnover. Method payment shall be electronic. Administrative penalties are listed in the Cabinet Decision no. 40 of 2017 on www.tax.Government.ae

Tables of Violations and Administrative Penalties
Appendix to the Cabinet Decision No. (40) Of 2017

Table (1): Violations and Administrative Penalties related to the Implementation of the Federal Law
No. (7) of 2017 on Tax Procedures Administrative Penalty (AED) Description of Violation
Description of Violation Administrative Penalty (AED)
1 The failure of the person conducting Business to keep the required records and other information specified in Tax Procedures Law and the Tax Law (10,000) for the first time. (50,000) in case of repetition.
2 The failure of the person conducting Business to submit the data, records and documents related to Tax in Arabic to the Authority when requested. (20,000)
3 The failure of the Taxable Person to submit a registration application within the timeframe specified in the Tax Law. (20,000)
4 The failure of the Registrant to submit a deregistration application within the timeframe specified in the Tax Law (10,000)
5 The failure of the Registrant to inform the Authority of any circumstance that requires the amendment of the information pertaining to his tax record kept by Authority. (5,000) for the first time.
(15,000) in case of repetition
6 The failure of the person appointed as a Legal Representative for the Taxable Person to inform the Authority of his appointment within the specified timeframe. The penalties will be due from the Legal Representative's own funds. (20,000)
7 The failure of the person appointed as a Legal Representative for the Taxable Person to file a Tax Return within the specified timeframe. The penalties will be due from the Legal Representative's own funds. (1,000) for the first time.
(2,000) in case of repetition within (24) months.
8 The failure of the Registrant to submit the Tax Return within the timeframe specified in the Tax Law. (1,000) for the first time.
(2,000) in case of repetition within (24) months.
9 The failure of the Taxable Person to settle the Payable Tax stated in the submitted Tax Return or Tax Assessment he was notified of, within the timeframe specified in the Tax Law. The Taxable Person shall be obligated to pay a late payment penalty consisting of:
- (2%) of the unpaid tax is due immediately once the payment of Payable Tax is late;
- (4%) is due on the seventh day following the deadline for payment, on the amount of tax which is still unpaid.
- (1%) daily penalty charged on any amount that is still unpaid one calendar month following the deadline for payment with upper ceiling of (300%).
10 The submittal of an incorrect Tax Return by the Registrant. Two penalties are applied:
1. Fixed penalty of:(3,000) for the first time.(5,000) in case of repetition

2. Percentage based penalty shall be applied on the amount unpaid to the Authority due to the error and resulting in a tax benefit as follows:

- (50%) if the Registrant does not make a voluntary disclosure or he made the voluntary disclosure after being notified of the tax audit and the Authority has started the tax audit process, or after being asked for information relating to the tax audit, whichever takes place first.

- (30%) if the Registrant makes the voluntary disclosure after being notified of the tax audit and before the Authority starts the tax audit.

- (5%) if the Registrant makes a voluntary disclosure before being notified of the tax audit by the Authority.
11 The Voluntary Disclosure by the Person/Taxpayer of errors in the Tax Return, Tax Assessment or Refund Application pursuant to Article 10 (1) and (2) of the Tax Procedures Law. Two penalties are applied:
1. Fixed penalty of: (3,000) for the first time.(5,000) in case of repetition

2. Percentage based penalty shall be applied on the amount unpaid to the Authority due to the error and resulting in a tax benefit as follows:

- (50%) if the Person/Taxpayer makes a voluntary disclosure after being notified of the tax audit and the Authority starting the tax audit or after being asked for information relating to the tax audit, whichever takes place first.

- (30%) if the Person/Taxpayer makes the voluntary disclosure after being notified of the tax audit but before the start of the tax audit

- (5%) if the Person/Taxpayer makes voluntary disclosure before being notified of the tax audit by the Authority.
12 The failure of the Taxable Person to voluntarily disclose errors in the Tax Return, Tax Assessment or Refund Application pursuant to Article 10 (1) and (2) of this the Tax Procedures Law before being notified that he will be subject to a Tax Audit Two penalties are applied:
1. Fixed penalty of:(3,000) for the first time.(5,000) in case of repetition
2. (50%) of the amount unpaid to the Authority due to the error resulting in a tax benefit for the Person/Taxpayer.
13 The failure of the Person conducting Business to facilitate the work of the Tax Auditor in violation of the provisions of Article (21) of the Tax Procedures Law. (20,000)
14 The failure of the Registrant to calculate Tax on behalf of another Person when the registered Taxable Person is obligated to do so under the Tax Law. The Registrant shall be obligated to pay a late payment penalty consisting of:
- (2%) of the unpaid tax is due immediately once the payment of Payable Tax is late;

- (4%) is due on the seventh day following the deadline for payment, on the amount of tax which is still unpaid.

- (1%) daily penalty charged on any amount that is still unpaid one calendar month following the deadline for payment with upper ceiling of (300%).
15 A Person not accounting for any tax that may be due on import of goods as required under the Tax Law. (50%) of unpaid or undeclared tax.
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Dubai Water Canal Cruise

2Reviews
Availability: Daily
Duration:2.5 Hours (Approx)
Starting Time: 19:00:00
Pickup & Drop Back
Instant Confirmation
Free Cancellation 72 hours Prior
Printed Voucher Accepted
English
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TOUR OVERVIEW
Dubai Water Canal Cruise

Take our New Dubai Water Canal Cruise to enjoy Dubai’s newest attractions at its magical! Aboard a traditional wooden dhow, you’ll float through the heart of Dubai, passing by Ras Al Khor Sanctuary, Sheikh Zayed Road Waterfall Bridge, Burj Khalifa, W Hotel, St Regis, and JW Marriott Marquis, among other iconic and impressive sights.

What makes this cruise even more exciting is that you’ll get to sail on the newest and grandest Dubai Water Canal. Featuring a captivating waterfront of more than six kilometers length, the canal stretches from Business Bay through Safa Park and Jumeirah to the Arabian Gulf, culminating at the Jumeirah Beach Park. On this 2.5 hour cruise, you’ll take in the glamorous attractions along Business Bay and Sheik Zayed Road, drift under the resplendently-lit bridges, and see locals as well as tourists walking along the banks of the canal.

Besides unfolding before you Dubai’s gorgeous nighttime scenery, this high spirited experience also lets you feast on a wide assortment of local and international delights, served buffet style in an intimate setting offering an unmatched from-the-water vantage point of the city highlights.  


INCLUSIONS
    • Pick up from your Hotel
    • 2 Hours Cruising
    • Welcome drinks
    • International Buffet Dinner
    • Tanoura dance
    • Drop off at your Hotel
TIMINGS
Duration Departure Point Reporting Point Tour Language Meals
2.5 Hours (Approx) Hotel (Centrally located in City Center Area) Hotel Lobby English
Option : 1
Dubai Water Canal Cruise
Description :
Take a glance of the magnificent Dubai Water Canal Cruising all the way through it with the best Culinary delights.
Pick up Time :
TBA (To be advised)
Note: If Tour Booked without Transfers, Please confirm the Tour Location & Timings with our Customer Support team if required.
IMPORTANT INFORMATION
    • Transfer option is available for this Tour activity on Sharing and Private depending on the Booking selection.
    • The Pick up will be arranged from City Center Hotels.
    • Pick up from Areas other than City Center will be done on request with an additional surcharge.
    • Sharing transfers is available from Deira, Bur Dubai, Sheikh Zayed upto Marina.
    • If guests fail to report within the given time it will be a NO Show and there will be no Rescheduling or Refund for it.
    • Minimum 4 persons required for this activity on sharing transfers.
    • As per the new taxation rules of UAE, 5% VAT will be implemented for all hospitality related services from 1st Jan 2018.
    • The pick up / drop off timing on Sharing transfers can be modified as per the trip schedule by 30 to 60 minutes, depending on traffic conditions and your location.
    • Location Address-Opposite to Palazzo Versace Dubai
BOOKING POLICY
Cancellation Policy
  • All cancellations made 72 hours prior to the Tour departure time NO charges will be applicable
  • If cancellation made within 72 hours to your Tour departure time 100% charges will be applicable
  • If eligible for Refund your Amount will be returned back to your Account within 7 working days

Ticket Policy - Once your tickets are issued system will not allow you to cancel any order

Child Policy
Children under 3 years will be considered as infant and entry will be free of cost.
Children between age 3 to 10 will be considered as child and charged child rate.
Children above age 10 will be considered as an adult and charged adult rate.
REVIEWS
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It was a Perfect holiday vacation!

On the last day of our Dubai holiday, we went on a Dubai Water Canal Cruise arranged by Rayna Tours. It was the perfect finale to our week-long holiday. The Water Canal is an extension to the glamorous city of Dubai and gives a glimpse of the most luxurious area of the city. Apart from the beautiful views, we also enjoyed the delicious dinner served on board.

5.0/5.0

Excellent

Dubai Water Canal Cruise is absolutely a must take experience!

The Dubai Water Canal Cruise was absolutely amazing. I and my wife were looking forward to a relaxing evening and we decided to go on a cruise on the new Dubai Water Canal. The ambience was romantic and we enjoyed the delicious delights served onboard. However, the highlights of the evening were the gorgeous sights that we saw while cruising along the Business Bay and Sheikh Zayed Road.

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