For travel and tour companies — is VAT due on the whole package price, or just the margin?

The answer depends on the role the travel company actually plays in the deal, not on a formally named margin scheme like the one some other jurisdictions apply. UAE VAT law distinguishes between selling as a "principal" and selling as an "agent," and that distinction is what determines how VAT is calculated on a travel package.

If the travel company sells the package in its own name and takes full contractual responsibility for delivering it — flights, hotel, and transport bundled as one product — it's treated as a principal, and VAT is due on the full amount the traveler pays, with input VAT recoverable on what the company itself paid its actual service providers. If instead the company is arranging bookings on behalf of another supplier (a hotel or an airline) and earning only a commission, it's treated as a disclosed agent, and VAT is due only on that commission or service fee — not on the full package value.

In practice, this distinction is the route through which a margin-style outcome shows up for tour operators in the UAE, and it turns on how the contract and the actual invoicing are structured, not on what label the business gives itself. Mixed packages, where a company is principal for some components and agent for others, need to be split accordingly, and getting the classification wrong risks under-declaring output VAT on the portion that should have been taxed in full.

RASEEKH reviews travel companies' contracts and invoicing to establish the actual role being played on each package, and gets the VAT due on it right from the start.