Restaurants in Dubai charge Municipality fee, Service charge, and VAT.
Let's say all Prices are inclusive/exclusive of 10% service charge, 7% Municipality fee and 5% VAT.
How can I calculate this? Also, how are each fee calculated?
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This is a better question for the Money StackExchange, as it has little to do with travelling and more to do with a localities tax and service laws.– user29788Commented May 30, 2022 at 6:56
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1It’s quite surprising on the first receipt that all tax/service amounts are computed on the basis of the same amount excluding tax and service. I would have expected at least the service charge to be included in the taxable amount.– jcaronCommented May 30, 2022 at 8:08
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1 Answer
First receipt has these charges listed out explicitly, on other receipts the prices are already inclusive (although the VAT amount is explicitly shown).
So for example, the last receipt shows AED1531.00 charge which is inclusive of all the taxes. It then lists the taxes: 5% VAT, 7% Mun. fee, 10% service. Total 22%. So 1531.00 is 122% of the original amount. Your total before taxes thus is 1254.92 (1531 / 1.22). You can then calculate each of the taxes from that amount. It may not add up perfectly because of the rounding errors.
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1The computation is only valid if the taxes/charges are not compounded (at least partially: I would expect all taxes to be added to the service charge). First receipt seems to indicate they are not, but that seems quite surprising to me. From what I found, only voluntary tips are exempt from VAT.– jcaronCommented May 30, 2022 at 8:25
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@jcaron I actually couldn't understand exactly how the VAT ends up calculated, the numbers on the last receipt don't match. 5% is 68.74, which is for total of 1374.80. That means additional 119.88 were taxed. This seems too low for the 17% total, or 10% SC, but too high for the 7% Muni. In any case, usually for tax purposes only VAT matters, which is why it's explicitly stated even when included in total. Commented May 30, 2022 at 18:31