How VAT Consultants In UAE Help Restaurant Entrepreneurs?

How VAT Consultants In UAE Help Restaurant Entrepreneurs?

Since the introduction of VAT in the Gulf region, it has an influential impact on the Food and Drinks industry. It has been launched on 1st January 2018 and from that time, restaurant entrepreneurs are often found visiting VAT consultants in UAE. It being introduced round the corner, most of the businesspersons are still trying to figure out its likely impact on their sell-products.

Having a good understanding on UAE VAT policies is necessitating for the restaurant owners in order to smoothen their business revenue. Here, comes the role of a VAT consultant who can properly guide you for the VAT registration. In addition to it, an advisor also pilots you to file a VAT return online.

Here are some factors that raise confusion among the businessperson and VAT consultants in UAE help them with innovative solutions.

Which of the restaurants have to be a VAT registered business?

According to Gulf Cooperation Council in UAE, restaurants and cafeterias with annual turnover of more than Dh375,000 are compelled to register under VAT regime. To be precise, restaurants and cafes, that make a daily sale of AED 1000 on an average, are subject to VAT threshold. The update also informs that the trades with taxable turnovers between Dh187,500 and Dh375,000 come under the regulation of “optional VAT registration”. This actually sums up to almost every café and restaurants in UAE.

The standard VAT rate is 5% for every business in UAE. Most of the businessperson does not possess a thorough idea on this matter. Thus, they run for consultants in order to grasp the impact of VAT. On big concern for these restaurants and cafeterias is associated with the issuance and filling of invoice against each transaction. If the restaurants need to fulfill the VAT requirements, it is mandate for them to issue the tax invoice for every service delivery.

According to VAT consultants, either summary invoice or comprehensive invoice is applicable for this purpose. Till now, GCC hasn’t provided any more update on the same. As most of the customers are going to be end users, majority of the restaurants won’t require B2B invoices.

The advisors provide them with the exact idea and discuss them on the subsequent factors –

  • What is VAT and how it works
  • Background of VAT implementation in GCC region
  • Pre-requisites and preparation for business to adopt the impact of VAT
  • Competence and skill set required by the restaurant squad
  • VAT calculations, ingredients and reporting framework
  • Financial, Marketing and Business impact in the pre and post implementation period
  • Time Frame vs. VAT preparation
  • Both internal and external VAT challenges
  • VAT mitigation strategies
  • How to file VAT return

A restaurant entrepreneur can call for input tax credit from his or her food business in the subsequent general activities:

  • Purchase of food items
  • Restaurant rent
  • Delivery Vehicles
  • Packing materials
  • Furniture and fixtures
  • Stationary
  • Office equipments
  • Kitchen equipments

According to the latest VAT regime, every business needs to furnish supportive documents for a span of five years. However, UAE government is now thinking of an alternative plan for the small business. It may appear as compounding scheme but, nothing is yet finalized. This system enables entrepreneurs to deposit tax, at a special rate, on the gross sales value without opting for input credit.  Well, restaurant entrepreneurs need to wait for this new plan to come up and till then, they must repeatedly consult with the consultants to adopt VAT regulation.


Since the introduction of VAT in UAE, restaurant businesses are in utter confusion regarding the impact of VAT. Determining the exact VAT treatment has become a different chore in all.

Author Bio

Al Ameesha, a high-profile VAT consultant in UAE, has been associated with for more than 2 years now. She is the most promising vat consultancy services in uae.

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