VAT on Restaurant Food in the UAE: A Complete Guide for Owners
Quick answer: Restaurant food and drink sold in the UAE is subject to 5% VAT, the standard rate set by the Federal Tax Authority. If your taxable turnover exceeds AED 375,000 a year you must register for VAT, charge 5% on your sales, issue compliant tax invoices showing your 15-digit TRN, and file VAT returns. Most prepared food served by restaurants is standard-rated, not zero-rated or exempt.
VAT touches every plate you sell, every supplier invoice you pay, and every return you file — and getting it slightly wrong is expensive in a business that already runs on thin margins. This guide walks through how VAT actually works for a UAE restaurant, in owner-to-owner language, with the numbers and the rules in one place. TajerGo, the UAE-built restaurant operating system that combines POS, inventory, purchasing, Khata, AI insights, and VAT compliance in one platform, is built so the VAT side runs correctly in the background — but you should still understand what's happening, and that's what this guide is for.
Is restaurant food subject to VAT in the UAE?
Yes. Food and beverages served by a restaurant, café, or QSR in the UAE are standard-rated at 5% VAT. This is the rate introduced across the UAE and administered by the Federal Tax Authority (FTA). A common point of confusion: some basic food items can be treated differently in other VAT systems, but prepared food served by a restaurant is standard-rated — when you cook it and serve it, it carries 5% VAT regardless of the underlying ingredient.
That means dine-in, takeaway, and delivery of your food are all standard-rated supplies. The 5% is added to the price the customer pays (or is already baked into it — more on inclusive vs exclusive pricing below), and you remit it to the FTA.
When does a restaurant have to register for VAT?
Registration is driven by your taxable turnover over a rolling 12-month period:
| Threshold | Amount (annual taxable turnover) | What it means |
|---|---|---|
| Mandatory registration | Exceeds AED 375,000 | You must register for VAT |
| Voluntary registration | Exceeds AED 187,500 | You may choose to register |
| Below voluntary threshold | Under AED 187,500 | Not required to register |
Most established restaurants comfortably clear the AED 375,000 mandatory threshold, so VAT registration is not optional for them. Registration is done through EmaraTax, the FTA's online portal, and once registered you are issued a Tax Registration Number (TRN) — a 15-digit number that must appear on your tax invoices.
Why the threshold matters operationally: you measure against a rolling 12 months, not a calendar year. A café that grows quickly can cross AED 375,000 mid-year and trigger a mandatory registration obligation. Watching your trailing turnover is part of staying compliant — not a once-a-year check.
What is output VAT vs input VAT?
This is the mechanism that makes VAT work, and understanding it is what stops you over- or under-paying:
- Output VAT is the 5% you charge your customers on your sales.
- Input VAT is the 5% you pay your suppliers on the things you buy (ingredients, packaging, equipment, rent where VAT applies).
- On your VAT return, you broadly pay the FTA the difference: output VAT collected minus the input VAT you're entitled to recover.
So the VAT you actually hand over is not 5% of all your sales — it's 5% of the value you added. This is why keeping clean records of the VAT on your supplier invoices matters: every dirham of recoverable input VAT you fail to capture is money you overpay.
What makes a VAT-compliant tax invoice?
When you make a standard-rated supply, you must issue a tax invoice. A full tax invoice carries:
- The words "Tax Invoice" clearly shown
- Your name, address, and 15-digit TRN
- A unique invoice number and the date
- A description of the goods/services (your line items)
- The amount before tax, the 5% VAT amount shown separately, and the total
- The buyer's details and TRN where the supply is to another VAT-registered business (B2B)
For smaller consumer transactions, the UAE allows a simplified tax invoice — a lighter format permitted where the supply is to a non-registered customer or below a set value (the simplified-invoice threshold sits at AED 10,000). A busy café handing a receipt to a walk-in customer typically issues a simplified tax invoice; a catering job billed to a company needs a full tax invoice with the buyer's TRN.
| Invoice type | When you use it | Must include buyer TRN? |
|---|---|---|
| Full tax invoice | B2B sales; supplies at/above AED 10,000 | Yes |
| Simplified tax invoice | Consumer sales; supplies under AED 10,000 | No |
Should menu prices include VAT or add it on top?
For a restaurant selling to consumers, displayed prices are generally expected to be VAT-inclusive — the price on the menu is what the customer pays, with the 5% already inside it. That protects the customer from a surprise at the till.
The two ways to think about it:
- VAT-inclusive: a dish shown at AED 100 already contains AED 4.76 of VAT (because 100 ÷ 1.05 = 95.24 net, and 95.24 × 5% = 4.76).
- VAT-exclusive: a net price of AED 100 becomes AED 105 once 5% VAT is added.
The arithmetic trips people up: to pull the VAT out of an inclusive price you divide by 1.05, you don't simply take 5% off. Getting this wrong on every menu item quietly distorts your margins. Your POS should handle the inclusive/exclusive calculation correctly and consistently so the figure on the receipt and the figure in your reports always agree.
How does VAT work on delivery and aggregator orders?
Delivery of your food is still a standard-rated supply, so the food element carries 5% VAT just as dine-in does. Where it gets more involved is the aggregator relationship — commissions, service fees, and who issues what invoice to whom all have VAT consequences, and the treatment depends on the commercial arrangement. The practical rule for an owner: account for the VAT on the food you sell, and keep the aggregator's commission invoices (which carry their own VAT) so you can recover the input VAT you're entitled to. Because this area has genuine nuance, it has its own detailed guide in this cluster.
How and when do I file VAT returns?
Once registered, you file periodic VAT returns through EmaraTax — typically quarterly, though the FTA assigns your filing period. Each return reports:
- Your output VAT (the 5% you charged on sales for the period)
- Your input VAT (the recoverable 5% you paid suppliers)
- The net VAT payable to the FTA (or refundable to you)
Filing and paying on time matters: the FTA applies administrative penalties for late registration, late filing, and late payment. The work of filing is mostly the work of having clean records all quarter — which is an argument for letting your POS and back office capture the VAT correctly on every transaction rather than reconstructing it at quarter-end.
How does VAT connect to e-invoicing?
VAT and e-invoicing are separate obligations that share the same plumbing. VAT is the tax; e-invoicing is the way certain invoices must be transmitted from 2027. The UAE e-invoicing mandate — run by the FTA under the Ministry of Finance through Ministerial Decision No. 243 of 2025 and No. 244 of 2025 — applies to B2B and B2G invoices, not consumer sales, and rolls out from a pilot on 1 July 2026 to mandatory dates of 1 January 2027 (AED 50M+ businesses) and 1 July 2027 (others).
The link that matters: an invoice that is correct for VAT — right TRN, 5% broken out, clean line items — is most of the way to being ready for e-invoicing in the PINT AE format. Getting VAT right today is the foundation that makes e-invoicing a small step later. (See the e-invoicing pillar in this cluster for the full picture.)
What are the most common VAT mistakes restaurants make?
- Treating prepared food as zero-rated. Served restaurant food is standard-rated at 5% — don't assume a basic-food exception applies.
- Mishandling inclusive pricing. Taking 5% off an inclusive price instead of dividing by 1.05, and quietly losing margin on every cover.
- Missing recoverable input VAT. Not capturing the VAT on supplier and aggregator invoices, so you overpay on the return.
- Wrong invoice type. Issuing a simplified invoice to a business that needs a full tax invoice with its TRN.
- Leaving reconciliation to quarter-end. Trying to rebuild a quarter of VAT from messy records instead of capturing it cleanly per transaction.
How TajerGo helps
TajerGo applies the correct 5% VAT to your sales, handles VAT-inclusive menu pricing so the receipt and your reports always agree, and produces VAT-compliant tax invoices with your 15-digit TRN — full invoices for B2B, simplified for consumer sales. On the buying side, purchasing and inventory capture the input VAT on supplier invoices, so the recoverable tax isn't lost. The Admin portal keeps output and input VAT organised across branches, which turns return season into a review rather than a reconstruction. And because the invoice data is already clean and structured, the move to e-invoicing in 2027 is a connection step, not a rebuild — all from AED 499 per branch with every feature included.
Frequently asked questions
Is there VAT on restaurant food in the UAE? Yes. Food and drink served by a restaurant, café, or QSR is standard-rated at 5% VAT under the Federal Tax Authority. Dine-in, takeaway, and delivery of prepared food are all standard-rated.
At what turnover must a UAE restaurant register for VAT? Registration is mandatory once taxable turnover exceeds AED 375,000 over a rolling 12-month period, and voluntary above AED 187,500. Registration is done through EmaraTax, which issues your 15-digit TRN.
Is prepared restaurant food zero-rated in the UAE? No. Prepared food served by a restaurant is standard-rated at 5%, not zero-rated. The standard rate applies regardless of the underlying ingredients once the food is prepared and served.
Do UAE menu prices include VAT? For consumer sales, displayed prices are generally VAT-inclusive, meaning the 5% is already contained in the menu price. To find the VAT inside an inclusive price you divide by 1.05 rather than simply subtracting 5%.
How often do restaurants file VAT returns in the UAE? VAT returns are filed periodically through EmaraTax, typically quarterly, with the filing period assigned by the FTA. The return reports output VAT on sales, recoverable input VAT on purchases, and the net amount payable.
What is the difference between a tax invoice and a simplified tax invoice? A full tax invoice includes the buyer's details and TRN and is required for B2B supplies and supplies at or above AED 10,000. A simplified tax invoice is a lighter format permitted for consumer sales and supplies under AED 10,000.
About TajerGo: TajerGo is a UAE-built restaurant operating system that combines POS, inventory, purchasing, Khata, AI insights, and VAT compliance in one platform, from AED 499 per branch, with every feature included and no upgrade gatekeeping.
Read next: How to issue a VAT-compliant tax invoice · TRN explained for UAE restaurants · VAT-inclusive vs VAT-exclusive pricing on UAE menus · Does e-invoicing apply to your restaurant?
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