A Dubai hotel bill stacks four charges, and they don't share a base. VAT covers the room rate and service charge, the municipality fee covers the room rate alone, and Tourism Dirham is a fixed amount per room per night.
How it is worked out
- Service charge is 10% of the room rate.
- VAT is 5% of the room rate plus the service charge.
- Municipality fee is 7% of the room rate alone.
- Tourism Dirham is added last, at AED 7 to 20 per room per night by hotel grade.
A worked example
| Room rate | AED 1,000.00 |
|---|---|
| Service charge 10% on 1,000.00 | AED 100.00 |
| VAT 5% on 1,100.00 | AED 55.00 |
| Municipality fee 7% on 1,000.00 | AED 70.00 |
| Tourism Dirham, 1 room x 1 night at 15.00 | AED 15.00 |
| Total | AED 1,240.00 |
What to watch for
- These are Dubai's rules. Other emirates set their own fees.
- Tourism Dirham stops after 30 consecutive nights. Zitlin doesn't apply that cap for you, so correct longer stays by hand.
- Sources don't all describe the VAT base the same way, so check yours with your accountant.
Doing this in Zitlin
Add a tax under Settings with Service Charge, VAT and Municipality Fee in that order, and tick the box on VAT only. Then add a Tourism Dirham add-on charged per room per night on a 0% tax.
Frequently asked questions
Is VAT charged on Dubai's municipality fee?
The guidance we found says no: VAT applies to the room rate and service charge, and not to the municipality fee or Tourism Dirham. Sources vary, so confirm with your accountant.
How much is Tourism Dirham?
AED 7 to 20 per room per night depending on the hotel's grade, for up to 30 consecutive nights.
Sources
- Tax Advisors UAE: hotel tax and Tourism Dirham
- FindCPA: municipal fees and tourism taxes in the UAE
- TrueTripCosts: hotel tax by country
Checked November 2026. This is a guide rather than tax advice, and rates change. Confirm yours with the UAE Federal Tax Authority and Dubai's Department of Economy and Tourism or your accountant.