Whether Restaurant Tip received considered as Out-of-Scope for VAT purposes in UAE?

Hi,

Please confirm, whether Restaurant Tip received is considered as Out-of-Scope for VAT purposes in UAE. The taxpayer will receive those Tips amount in both Cash and via Card directly to his bank.

Thank You.

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SAJITH N23/08/2022 18:38:20

There is no specific guidance on this matter with respect to UAE VAT. However you may refer the KSA VAT guidance on discretionary tips to understand the possible VAT treatment - https://zatca.gov.sa/en/HelpCenter/guidelines/Documents/Recreation%20and%20Entertainment.pdf

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