Any business whose annual turnover is above AED 375,000 is eligible for VAT. In aggregate, if a restaurant collects AED 1,000 a day or above then that is eligible for paying the taxes.
A clear breakup of the items that consumers ordered along with the tax 5% should be mentioned in the invoice. There is another simple version of billing that restaurants can opt for if they are unable to issue a normal invoice. Either way, the format has to match with the requirement of government under any circumstance.
Revision of Prices
Now, as the FTA started VAT system, it is important for the organizations to let their customers know about it. The restaurants have to put up revised prices so that they can collect the VAT amount from customers.
There are two ways to let customers know that they are paying more tax.
1. Prices added in Menu:
The restaurateurs should add the VAT for the original price of an item and mention the updated price in the menu. The fast-food joints and other normal restaurants should go with this plan.
2. Mentioning VAT Extra in Footnote :
In fine dining restaurants, they can just print up a small footnote at the end of the menu stating that the customers will be charged 5% VAT extra.
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