Extra Charges in Dubai Explained: Service Charge, VAT, Municipal Fee & Tips

We break down every line on your restaurant or hotel bill, from VAT and Service Charge to hidden fees. Learn how to pay like a local and plan your budget.

Imagine: a perfect dinner in Dubai, a view of the glittering skyscrapers, impeccable service... And then the bill arrives, which is a third higher than the prices listed on the menu. Sound familiar?

Relax-it’s not a waiter’s mistake or an attempt to scam you. It’s the infamous “Dubai math,” a set of special rules that often leave even seasoned travelers baffled. Let’s figure out how to come out ahead in this game.

This article is your comprehensive guide to the financial jungle of Dubai. We’ll help you not only understand the structure of any receipt but also plan your budget in advance, avoid hidden costs, and feel completely confident when paying for any service, from a restaurant dinner to a hotel stay.

The anatomy of a Dubai bill: Decoding every line

The final bill at any establishment in Dubai is like a puzzle assembled from several mandatory components. Understanding each detail on the bill is the key to proper budgeting and avoiding misunderstandings during payment. Let’s take a close look at each of these components.

VAT (VAT) – 5%, a universal tax on everything

Value-added tax (VAT) is the basic component of any receipt in the UAE. This federal tax, similar to the VAT we are familiar with, was introduced in 2018 and has since added its 5% to almost everything: dinner at a restaurant, a hotel room, shopping at a mall. It is the first and absolutely unavoidable surcharge that you will see listed separately on your bill.

Municipality fee – 7%, your contribution to the city's beauty

Here’s a distinctly Dubai-specific "hello" in your bill. These 7% represent your personal contribution to the very things you admire—the dancing fountains, the perfectly maintained roads, and the stunning parks. Think of it as a "tax on the beauty around you," which the Emirate of Dubai levies on hotels, restaurants, and entertainment venues, and which they, in turn, include in your bill.

Service charge (10%): the main trap for tourists

This is where the main source of confusion lies. The 10% service charge is not a tip but a mandatory fee that constitutes the establishment's revenue. This money is used to cover the establishment's operating expenses, and the law does not require owners to pass it directly on to the staff.

Tips as an art of gratitude

Even with a 10% Service Charge included in the bill, the waiter will still expect additional gratitude from you for excellent service. This is an unwritten rule: good service is rewarded beyond the mandatory charge. Leaving an extra 10–15% shows your respect and aligns with local etiquette. However, if the bill does not include a Service Charge (which can happen in simple cafes outside tourist areas), those same 10–15% shift from a polite gesture to your direct obligation.

Quick reference table for tipping:

Hotel bill: don't forget about the tourism dirham

When settling your hotel bill, another fee, Tourism Dirham, will be added to the total. This is a fixed tourist tax charged per night of stay. Its amount depends on the hotel category and ranges from 7 to 20 dirhams per night. It is important to remember: this fee is charged per room as a whole, not per guest, and is usually paid upon check-in or check-out.

Final calculation: how 100 dirhams turn into 122

Let's summarize with an example from a restaurant bill. To the base cost of your order, the following are added sequentially: 5% VAT + 7% Municipality Fee + 10% Service Charge. In total, this results in a 22% surcharge. Thus, a dish priced at 100 dirhams on the menu will cost you at least 122 dirhams.

Your financial plan for Dubai: Practical tips and life hacks

Now that we know what expenses consist of, it's time to move on to the more enjoyable part—ways to optimize these costs. Here are several proven tips that will help your wallet.

Money: currency exchange, bank cards, and Tax free

The official currency of the UAE is the dirham (AED). Visa and Mastercard bank cards are accepted almost everywhere, from taxis to boutiques. However, a few nuances can help you save money.

Look for the best exchange rate at currency exchange offices in major malls, not at the airport or hotel.

Now, let’s move on to the “Get Your VAT Back” quest, which can save you a nice sum of money. Here’s how to complete it:

• Step 1: In the store. After making a purchase worth at least 250 AED, don’t rush off just yet. Ask the salesperson for the magic document—the Tax Free receipt. This is your main treasure.
• Step 2: At the airport (before check-in!). Find the Planet operator’s desk. Present your treasures: your purchases (yes, they must be with you!), the receipts, and your passport. They will stamp the validation stamp you’ve been waiting for.
• Step 3: Receiving your reward. After validation, head to the refund counter and collect your money—either in cash or via bank transfer. Keep in mind: the operator will charge a small fee for their services, so you won’t get back the full tax amount, but about 85–92% of it. Still, that’s a nice win!

Transportation: how to get around the city cost-effectively

• The metro is your traffic-jam savior. If you need to cross half the city (for example, from the Marina to Burj Khalifa), the futuristic driverless trains are the fastest and most budget-friendly option. Just buy a reloadable Nol card and enjoy the views.
• Taxis are the gold standard. Official cream-colored taxis with colored roofs are reliable, convenient, and always metered. No price surprises—just hop in and go.
• Uber/Careem-for comfort seekers. Local equivalents that offer slightly higher-class vehicles at prices comparable to regular taxis. Sometimes, during off-peak hours, you can find even more advantageous rates.

Food and entertainment: secrets of smart savings

• Business lunches: On weekdays, many high-end restaurants offer set lunches at a fixed price that can be 2–3 times lower than the cost of a similar dinner.
• Coupon apps: Explore apps such as The Entertainer (which offers “buy one, get one free” deals), Cobone, and Groupon UAE. These apps provide great discounts on restaurants, spas, and entertainment.
• Authentic neighborhoods: Head to the Deira and Bur Dubai areas. Here, you’ll find numerous authentic cafés offering delicious and affordable food, as well as traditional markets where prices for souvenirs and spices are significantly lower than in tourist malls.
• Bargaining at the souks: At traditional markets (gold, spice, textile), bargaining is not only acceptable but also expected. In shopping malls and boutiques, prices are fixed.

How to avoid fines: Key rules and common mistakes

We’ve covered planned expenses. However, financial surprises in Dubai can be far more unpleasant. Ignorance of local laws and regulations can result in serious fines. Let’s examine where you need to be especially careful.

Entry regulations: passport, visa, and customs

For citizens of Russia and most EU countries, a visa for the UAE is issued free of charge upon arrival. The main thing is to ensure that your passport is valid for at least six months from the date of entry. But special attention should be paid to the customs regulations, which are very strict here. Duty-free import limits include up to 4 liters of alcohol, up to 400 cigarettes, and cash up to 60,000 AED (amounts exceeding this must be declared).

Cultural norms and laws: what is allowed and what is not

Dubai is an amazing blend of a cutting-edge metropolis and deep respect for tradition. You can do almost anything here, but there are a few simple rules of etiquette that, if followed, will make your stay completely peaceful.

• Alcohol: Alcohol may only be consumed in licensed venues (bars and hotel restaurants). Being visibly intoxicated in a public place is an offense. There is zero tolerance for drunk driving, with penalties including imprisonment.
• Dress code and behavior: Outside the beach and hotel premises, wear modest clothing that covers your shoulders and knees. Public displays of affection, such as kissing and hugging, are not permitted.

• Photography: It is strictly forbidden to photograph local residents, especially women, without their explicit consent.

Medical insurance-a cost-saving measure that can be expensive

Don't even think about skimping on medical insurance. This is the very "cheapo trap" that can turn your vacation into a financial disaster. Medical care for tourists in Dubai costs an astronomical amount: a simple visit to the doctor due to heatstroke can cost $150–200, and more serious issues can run into the thousands. Therefore, a good insurance policy is not an expense—it's your ticket to a worry-free vacation where your only concern is choosing between the beach and the pool.

Learning from others' mistakes: a table of typical errors

Dubai without surprises: Wrapping up

So now you know Dubai’s main secret: the magic of this city lies not only in its skyscrapers but also in the numbers on your receipts. And now you have this magic under control.

Remember the “Dubai coefficient,” keep our tips in mind, and financial puzzles will no longer distract you from what really matters—enjoying this incredible city, its hospitality, and its limitless opportunities. Travel with confidence, spend wisely, and bring home only unforgettable memories from Dubai—not unexpected debts. Have a great trip!