How corporate tax applies to restaurants in the UAE

What is corporate tax for restaurants in the UAE?

Corporate tax for restaurants UAE is the 9% federal tax on taxable profits above AED 375,000, introduced by Federal Decree-Law 47 of 2022. It applies to mainland restaurants, cafes, cloud kitchens, and qualifying free zone food and beverage businesses. The first 9 months after your financial year end is your filing window.

Whether you run a single shawarma counter in Deira or a 12-branch casual dining group across the Emirates, the rules are the same. This guide breaks down how the federal corporate tax regime treats restaurants, what counts as taxable income, which costs you can deduct, and which deadlines matter. For the wider picture, see our UAE Corporate Tax hub.

Who pays corporate tax in the UAE restaurant sector

Any restaurant operating through a UAE legal entity is in scope. That includes mainland limited liability companies, free zone companies, branches of foreign companies, and sole establishments that meet the business threshold. Natural persons running a food business pay corporate tax only if turnover exceeds AED 1,000,000 in a calendar year.

Mainland restaurants

A mainland restaurant licensed by the Department of Economic Development pays 0% on the first AED 375,000 of taxable income and 9% on the rest. The same rate applies whether you serve fine dining, fast casual, or street food.

Free zone food and beverage operators

Restaurants licensed in free zones such as Dubai Multi Commodities Centre or Jebel Ali Free Zone may qualify as a Qualifying Free Zone Person (QFZP). A QFZP pays 0% on qualifying income and 9% on non-qualifying income. Most restaurant sales to the UAE public are mainland sales and do not qualify, so QFZP status rarely helps a typical dine-in or delivery concept.

Cloud kitchens and delivery-only brands

Cloud kitchens are treated like any other restaurant. The legal entity behind the kitchen registers for corporate tax, files annually, and applies the same 9% rate. Income from aggregator platforms is taxable revenue, and platform commissions are deductible expenses.

Rates, thresholds, and reliefs at a glance

The headline rate is simple, but the reliefs matter for small operators. Use the table below as a quick reference for a UAE restaurant business.

What counts as taxable income for a restaurant

Taxable income is accounting profit prepared under IFRS, adjusted for items the corporate tax law treats differently. For most independent restaurants under AED 50,000,000 in revenue, IFRS for SMEs is acceptable.

Revenue lines

All of the following are taxable revenue: dine-in food and beverage sales, takeaway and drive-through, delivery aggregator sales, catering contracts, private events, franchise fees received, royalty income, and service charges retained by the business. Tips paid directly to staff and held in trust are not the restaurant's income.

Common deductible costs

Direct operating costs are deductible if they are incurred wholly and exclusively for the business. Typical deductions for restaurants include:

• Food and beverage cost of goods sold
• Rent, service charges, and chiller fees
• Salaries, end of service benefits, visa costs, and medical insurance
• Utilities and gas
• Equipment maintenance, pest control, and cleaning
• Delivery platform commissions and marketing fees
• POS subscriptions, accounting software, and IT
• Depreciation of kitchen equipment, furniture, and fit-out
• License renewals, municipality fees, and food safety certifications
• Interest on business loans, subject to the general interest deduction limit

Items that are not deductible

Some costs you see in your P and L cannot reduce taxable income. These include fines and penalties, donations to non-approved entities, personal expenses of owners, dividends paid, and entertainment expenses beyond 50% of the cost.

Free zone restaurants and the QFZP test

Free zone operators often ask whether they can run a restaurant at 0%. The short answer is rarely. To keep the 0% rate, a QFZP must earn qualifying income and meet de minimis limits on non-qualifying income. Sales to UAE end customers, including diners and delivery users, are mainland-source revenue. They are non-qualifying.

A central kitchen in a free zone that supplies an in-group mainland restaurant company may earn qualifying income from related-party transactions if priced at arm's length, but the mainland restaurant still pays 9% on its own profits. Treat QFZP status as a planning question, not an automatic relief.

Small Business Relief for independent restaurants

If your restaurant entity earns no more than AED 3,000,000 in revenue in the relevant period and in every previous period since June 2023, you may elect Small Business Relief. The election treats you as having no taxable income for that period, so you pay nothing, but you still register and file. The relief is available for tax periods ending on or before December 31, 2026.

This is useful for a single-outlet cafe or a new concept in its early years. It does not apply to free zone qualifying persons or to members of large multinational groups.

Registration, filing, and record keeping

Every restaurant entity must register for corporate tax with the Federal Tax Authority (FTA) and obtain a Tax Registration Number (TRN). Registration is done through the EmaraTax portal. You file one corporate tax return per financial year, within 9 months of year end. A restaurant with a December year end files by September 30 of the following year.

Records you must keep

Keep records for at least 7 years. For a restaurant, that means daily Z-reports from your POS, supplier invoices, payroll registers, lease contracts, bank statements, VAT returns, and the trial balance and financial statements for each year. Aggregator statements from delivery platforms should be reconciled monthly.

E-invoicing and corporate tax

UAE e-invoicing under the Peppol 5-corner Decentralized Continuous Transaction Control and Exchange (DCTCE) model will phase in from 2026. Restaurants issuing B2B (business to business) invoices for catering contracts and corporate events will be affected. Phase 1 mandatory go-live is January 1, 2027 for businesses above AED 50,000,000 in revenue, and July 1, 2027 for smaller businesses. Clean e-invoicing data also makes corporate tax reporting faster.

Worked example: a Dubai casual dining restaurant

Assume a mainland LLC running one outlet. Financial year ends December 31, 2025.

• Revenue: AED 4,200,000
• Food and beverage cost: AED 1,470,000
• Staff cost: AED 1,050,000
• Rent and service charges: AED 600,000
• Utilities, marketing, platform fees, other operating cost: AED 500,000
• Depreciation: AED 180,000
• Accounting profit before tax: AED 400,000

Assuming no permanent differences, taxable income is AED 400,000. The first AED 375,000 is at 0%. The remaining AED 25,000 is taxed at 9%, giving corporate tax of AED 2,250. The return is due by September 30, 2026. The restaurant cannot claim Small Business Relief because revenue is above AED 3,000,000.

Common mistakes restaurant owners make

• Treating service charge as a tip and excluding it from revenue when the restaurant keeps it
• Forgetting to gross up aggregator sales: the gross order value is revenue and the commission is an expense
• Missing VAT on imported equipment under the reverse charge mechanism
• Not splitting personal and business spending on the owner's card
• Assuming a free zone trade license alone gives a 0% rate
• Skipping the corporate tax registration because the outlet is loss-making

How restaurants compare to other UAE sectors

The 9% rate is the same across sectors, but the practical impact differs. Compare the food and beverage business with related industries by reading Corporate Tax for Trading Companies UAE, Corporate Tax for Real Estate UAE, and Corporate Tax for Construction UAE. Service-led businesses face different mix issues, covered in Corporate Tax for Consultants UAE. For owner-operators and small kitchens, also see Corporate Tax for Freelancers UAE.

Official sources

Always check the primary regulations. Useful starting points are the UAE Ministry of Finance, the UAE Federal Tax Authority, and the UAE MoF e-invoicing portal. For a deeper view of the regime across sectors, return to our UAE Corporate Tax hub.

If you run a UAE restaurant group and want clean accounting data, accurate VAT returns, and a clear path into e-invoicing before the 2027 deadlines, get UAE e-invoicing pricing from EInvoice Direct. An accredited service provider is included with the software at no extra charge.