What taxes will a tourist have to pay in Abu Dhabi in 2024?

The UAE’s tax system is one of the most favorable and appealing in the world. But did you know that the perks mostly benefit residents and citizens? Here’s what you need to know about what tourists need to pay, if the government offer tax refunds and how much is a tourist visa.

Good news for Russian travelers: there are no visa fees for entering the UAE. Upon arrival, tourists receive an On Arrival visa, valid for 90 calendar days.

Taxes for tourists in Abu Dhabi  

VAT  

In the UAE, the VAT or Value Added Tax is set at a standard rate of 5%, uniformly applied across all goods and services. However, certain free zone areas offer VAT exemptions on products sold there.

Tourists can reclaim a portion of the VAT paid under a special program. You can recover up to 85% of the VAT amount. For instance, if you make a purchase worth $2,700 and the VAT is $135, you could receive a refund of $114.

Important VAT refund conditions:

1. The refund is available only to non-residents of the UAE. 
2. Goods must be purchased at accredited stores with a minimum spend of $68 and a Tax Free stamp must be obtained. Items must be unused.
3. Refunds will not be issued for opened perfume bottles or used electronics. 
4. Items must be exported within 90 days of purchase. 
5. To facilitate the VAT refund process, keep purchases in your carry-on luggage when departing. 
6. VAT will not be refunded on alcohol, tobacco products, weapons, ammunition, or pork products. 
7. VAT refunds are not available for large quantities of items intended for resale.

As of September 1, 2023, the Abu Dhabi capital no longer imposes a hotel stay tax. Previously, the tax was fixed at 4% on hotel bills plus $4 per night for each room, regardless of the hotel's category. Now, tourists may be asked to pay a deposit upon checking into a hotel. This deposit covers all services within the hotel complex and its amount depends on the hotel's policy. It’s advisable to inquire about this in advance via email or check the hotel’s website.

Federal service charge  

In most hotels, a 10% service charge applies. This charge may either be included in your bill or deducted from the deposit left at check-in.

Municipal tax  

Municipal tax, essentially a housing fee collected by the emirate, is included in utility bills and applies to all non-residents renting apartments. In Abu Dhabi, the municipal tax rate is 3% of the annual rental value.

How to check tax amounts before your trip  

Pre-trip tax information  

Typically, booking platforms do not display the tax amount. To determine the tax on your stay, you can check the hotel’s website directly. Alternatively, you can obtain this information from your travel operator or contact the hotel’s manager via email.

Tax comparison: Dubai and Ras Al Khaimah  

Tax rates vary based on the hotel's category, the number of days you stay, and the number of rooms booked. In general, tourists are required to pay taxes for the first 30 days of their stay.

Taxes for individuals  

1. In the UAE, residents enjoy the benefit of no personal income tax. This exemption covers not only salaries and sale transactions but also interest, dividends, royalties, wealth, luxury items, inheritance, and gifts. 
2. When purchasing real estate, two types of taxes apply: Property Transfer Tax and Registration Fee.
3. When selling property, you may need to pay half of the property transfer tax: 2% of the property's value in Dubai and 1% in Abu Dhabi.
4. Municipal Rental Tax Rental properties are subject to municipal taxes.

Taxes for corporations  

1. Companies with annual profits exceeding $102,000 are taxed at 9%. Multinational organizations with profits over €810 million face a 15% tax rate. All other companies are exempt from corporate tax. 
2. Companies with revenues exceeding $102,000 must pay VAT at a rate of 5%.

Conclusion  

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