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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Tours and Sightseeing

Abu Dhabi City Tours

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Abu Dhabi City Sightseeing Tours and Activities

Abu Dhabi city has so much to offer to its tourists that picking one attraction above the other is next to impossible, and that is exactly why Rayna brings to you the best of Abu Dhabi city across a choice of exclusively designed city tours. All our tours are aimed at offering you the best slice of Abu Dhabi and an experience of the city’s soul. From the largest handmad
...Read more e handloom carpet, highest high tea, the adrenaline pumping Ferrari world, and the cultural heritage of the Arabian traditions; no one shows you Abu Dhabi the way we do. Less
Travel Guide Abu Dhabi
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Abu Dhabi Sightseeing Tour

Duration: 4 Hours (Approx)

Coming to Abu Dhabi and not visiting Dubai is not a possibility. Team with us and go on an exclusive Dubai tour designed exclusively as per your itinerary. .. Read More...

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Have you thought you can visit all the celebrating hotspots of Abu Dhabi in a day? Our tour package gives you a glorious chance to experience the marvels and opulence of this city in our full day service. .. Read More...

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Al Ain City Tour from Abu Dhabi

Duration: 10 Hours (Approx)

Al Ain is undoubtedly the greenest and the most unique of all cities in the UAE, in terms of its intriguing ensemble of lush gardens, down to earth ambience, and historical and traditional attractions... Read More...

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Falcon Tour Abu Dhabi

Duration: 2 Hours (Approx)

A tour here will leave you with a memorable experience and guarantee a new found affection for the national bird of UAE- Falcons. This one of a kind hospital for falcons is a must visit.
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Dubai City Tour From Abu Dhabi

Duration: 10 Hours (Approx)

The UAE’s second largest city boasts of a spectrum of modern, historic and traditional attractions, and our all-encompassing Dubai City Tour is probably the most perfect way to get acquainted.. Read More...

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Have a free day? Let’s go on a trip to Dubai and see the enthralling emirate’s best attractions in the comfort and convenience of Rayna tours. Book a trip today!

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Emirates National Auto Museum

Duration: 4 Hours (Approx)

The place is both insightful and extremely exciting to visit. Our tour will ensure you don’t have to wait in queue for tickets and you get to enjoy the best of experience comfortably... Read More...

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Emirates Park Zoo

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Take a tour with the Emirates Park zoo in Abu Dhabi that houses a variety of elephants, giraffes along with 48 different varieties of birds, brown bears, white tigers and many more... Read More...

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Abu Dhabi City Tours Review
Average of 4.0/5.0 based on 155 reviews.

Dubai and Abu Dhabi Rayna Tour

Hello, I am Abhishek Goyal from Jaipur. I booked online Dubai and Abu Dhabi Rayna Tour from Qatar. I consult with Mr. Sameer from Rayna Tour & Travel. He suggested me really great package for my Mom and dad. So I thanks to Mr. Sameer and Rayna tours to given me such great services. I hope I will again go for same tour and travels for next visit.

5.0/5.0

Nice experience well organized

We booked two excursions with Rayna Tours, Al Ail full day and Abu Dhabi city tour half day. My mother language is not English, therefore excuse me for any mistake. The sales agent desk is located in our hotel lobby. He is friendly and provided us with details about the tours. The drivers picked us up at the expected date & time, no delay at all, and the cars were confortable. Al Ail is two hours drive far and highway is little boring, however that's it and our driver gave info along the way and we had a chance to make little conversation. Al Ail and the next stops included with the tour are beautifull and, for us, it is an opportunity to see places such as the camel market. Abu Dhabi half day city tour was perfect to visit the Grand Mosque (guided tour included) and further places. The Grand Mosque itself is extraordinary and visit is a must. Be aware that you must wear proper clothes to enter religious site and security check at the entrance will not allow goods considered as dangerous or similar.

4.0/5.0

Abu dhabi and musandam trip..

I booked with rayna tours to abu dhabi with our tour guide muhammad oqasha.. He's really knowledgeable and very patient.. He showed us around abu dhabi and we really enjoyed our time with him.. Thank you muhammad for making our trip wonderful.. And i also booked a tour with rayna tours to musandam with the help of himanshu. I told them in the last minute that I'm want to visit musandam the next day. It was almost impossible to do it but himanshu helped me sort out my visa and other stuff to enter oman.. He's very helpful and patience..thanks alot himanshu for the help..:)

5.0/5.0

Abu Dhabi Trip

I have to say this was a hell of a trip. So worth my time and money. Me and my best friend enjoyed every minute of it. Everything that was promised in the tour was delivered and more. Our tour guide Adnan Sabir knew how to make everyone feel good plus he was so funny. Like seriously the places we visted yes were great and enjoyable but the tour guide made it absolutely inpressive. Thank you Adnan for nor getting pissed at us everytime we were late oh and thank you adnan for one of the best experiences ever.

5.0/5.0

Dubai 2016

We had a great time with all our tours and transfers organised by Rayna Tours. Our your co-ordinator Kunal ensured every thing ran smoothly answered all my questions patiently no matter how endless they were. Our tour guides from the Abu Dhabi, desert safari and city tour were very good alongside the drivers who were very friendly. The trip was truly memorable. Thank you for making it amazing for my family and I.

5.0/5.0

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