United Arab Emirate and Saudi Arabia introduce VAT from 1st of January 2018
Food and beverages are now one of many items that are subject to VAT in GCC.
The six states of the Gulf Cooperation Council (GCC) region have agreed to introduce VAT, with the UAE and Saudi the first countries in the regional block to implement this. It is hoped that the introduction will generate $25 billion (Dh91.8 billion) in tax proceeds every year. Consumers will now have to pay an additional 5% VAT on a wide range of goods and services.
Time Out Dubai have published a list of goods and services that are now subject to 5% VAT. At the top of that list is Food and Beverage. Whilst the new five percent tax is considerably less than the twenty percent charged in the UK, it has still created a lot of additional work for hospitality venues within the GCC, whom will either have to amend the pricing on their menus accordingly, or absorb the 5% tax bill themselves.
How does VAT work with mobile ordering?
For our wi-Q and Mi-Room clients in the GCC, the 5% VAT implementation was actually very straight forward. The wi-Q Technologies developers, who are based in the U.K, remotely made some minor modifications to our U.A.E clients’ web-based mobile ordering platforms. Just like wi-Q and Mi-Room in the UK, these solutions in the U.A.E immediately reflected a 5% price increase on all applicable products and amended receipts.