Dubai hotel fees and taxes, quoted from the law
Three separate charges sit on a Dubai hotel bill and each has a published legal source. The Tourism Dirham is AED 7 to AED 20 per room per night by hotel class, capped at thirty consecutive nights. The municipality fee is 7%, reduced from 10% by Decree in 2019. VAT is 5%, and the federal tax authority’s binding position is that an advertised price must already include it. The 10% “service charge” you also see is set by no government instrument at all.
The Tourism Dirham, by hotel class
Set by Executive Council Resolution No. (2) of 2014, amended by Resolution No. (10) of 2014. This is Schedule (1) of that Resolution, reproduced as published. It is charged per room per night, not per guest.
| Category of hotel establishment | Fee per room, per night |
|---|---|
| Five-star hotel; luxury hotel apartment | AED 20 |
| Four-star hotel; deluxe hotel apartment; luxury holiday home | AED 15 |
| Three-star hotel; two-star hotel; standard hotel apartment; standard holiday home | AED 10 |
| One-star hotel; budget hotel; guest house | AED 7 |
The cap is the part almost nobody quotes. Article 3, as amended, reads: “For each night of occupancy of a room at a Hotel Establishment, a Guest will, for a maximum of thirty (30) consecutive nights, be charged the ‘Tourism Dirham Fee’.” A thirty-one night stay is charged the Tourism Dirham for thirty nights, not thirty-one. On a five-star room that is a difference of AED 20, and on a long relocation stay it is the difference between the fee being a rounding error and it not being one.
The municipality fee is 7%, and has been since 2019
Decree No. (27) of 2019, Article 1(b), states that the fee on “the Sales of Hotel Establishments” is “reduced from ten percent (10%) to seven percent (7%)”. Any page still printing 10% for a Dubai hotel is quoting a rate that was superseded seven years ago.
This is also the line that turns up on restaurant menus across the city. The menus we hold from Sirene Beach by Gaia and Gitano both carry the same small print: “All prices are in AED, inclusive of 10% service charge and 5% VAT. Subject to 7% municipality fee.” That last sentence is this Decree, and “subject to” means it is added on top of the printed figure.
What we cannot tell you is exactly what the 7% applies to. The base is defined by Regulation No. (2) of 2006, and that Regulation is not published in English on Dubai’s own legislation portal. So whether a specific line on your bill falls inside the taxable “sales of hotel establishments” is not something a reader can check against a primary source, and we are not going to infer it. That gap is the single largest one in this whole subject.
VAT is 5%, and the advertised price must include it
VAT in the UAE is 5% federally. The point most visitors miss is not the rate but the display rule. The Federal Tax Authority’s public clarification VATP020 states the binding position: “the advertised price of taxable supplies shall include the VAT.”
So a Dubai price tag that says AED 100 means AED 100, not AED 105. That is exactly why a venue quoting “plus 5% VAT” stands out — AquaFun’s waterpark rate does this, and it is unusual enough that we flag it rather than treat it as normal.
The tourist VAT refund: two official formulas that disagree
Both of the following come from the Federal Tax Authority. They do not describe the same calculation, and we are not going to pick one.
| Source | What you get back | Fee deducted |
|---|---|---|
| FTA tourist-refund leafletUndated | “85% of the total VAT amount paid” | “a fee of AED 4.80 per Tax Free Tag” |
| FTA service pageOn tax.gov.ae | “Deduction of 13% from the VAT amount requested” | “AED 3.60 for each tax-free transaction” |
85% against 87%, and AED 4.80 against AED 3.60. On a single tag the difference is small; across a shopping trip it is not, and more to the point it means no one can state the refund formula with confidence from official sources alone. Where two official sources conflict, this site publishes both with attribution rather than choosing.
The conditions, on which both sources agree: a minimum spend of AED 250, the claimant must be 18 or over and a non-resident of the UAE, and cash refunds are capped at AED 35,000 per claim.
The 10% service charge is not a tax
We looked for the instrument that sets it. There isn’t one. No Dubai or federal government instrument fixes a 10% service charge. It appears on menus and hotel bills as a matter of trade practice, and the venue keeps or distributes it as it chooses. Grouping it with VAT and the municipality fee under a heading like “taxes and fees” is common and misleading: two of those three are law and one is the venue’s own pricing decision.
Working the total out
A worked example, using the rates above and our own arithmetic — no authority publishes a combined figure, and the order in which the charges compound depends on the taxable base we said above is not publicly defined. Treat it as an illustration of scale, not a quotable rate. On a five-star room advertised at AED 1,000 a night for four nights: the Tourism Dirham adds AED 80 in total (AED 20 × 4 nights), flat and regardless of the room rate. The 7% municipality fee and the 5% VAT are proportional to the room rate. And under VATP020 the advertised AED 1,000 should already carry its VAT.
What this means practically: for a cheap room the Tourism Dirham is the charge that stings — AED 7 on a guest house is trivial, but AED 20 a night on a five-star room over a fortnight is AED 280. For an expensive room the percentage charges dominate and the Tourism Dirham disappears into the noise.
Related reading on this site: what a main course costs in Dubai, where the same service-charge and municipality-fee small print appears on the menus, and attraction ticket prices, where VAT is normally already inside the figure.
This is a transcription of what Dubai and the federal authorities publish, not tax advice. The taxable base for the municipality fee is not published in English, so whether a specific line on your bill falls inside it is not something this page can tell you.
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Common questions
What taxes are added to a Dubai hotel bill?
Three charges with published legal sources: the Tourism Dirham at AED 7 to 20 per room per night by hotel class, a 7% municipality fee, and 5% VAT. The 10% service charge you also see is set by no government instrument at all.
How much is the Tourism Dirham in Dubai?
AED 20 for a five-star hotel or luxury apartment, AED 15 for four-star, AED 10 for three- and two-star, AED 7 for one-star and guest houses. It is charged per room per night, not per guest.
Is there a limit on the Tourism Dirham?
Yes, and it is rarely quoted. The amended Article 3 caps it at thirty consecutive nights. A thirty-one night stay is charged for thirty.
Is the Dubai municipality fee 7% or 10%?
7%. Decree No. 27 of 2019 reduced it “from ten percent (10%) to seven percent (7%)”. Any page still printing 10% is quoting a rate superseded seven years ago.
Does the advertised price in Dubai include VAT?
It should. The Federal Tax Authority's clarification VATP020 states that “the advertised price of taxable supplies shall include the VAT”. A venue quoting “plus 5% VAT” is the exception, not the norm.
How much VAT can tourists claim back in Dubai?
Two FTA sources disagree: one says 85% of the VAT paid minus AED 4.80 per tag, the other a 13% deduction plus AED 3.60 per transaction. Both agree on a AED 250 minimum spend, 18+, non-resident, and an AED 35,000 cash cap.