How is UAE VAT calculated — add and remove?

UAE VAT is 5% (Federal Decree-Law No. 8 of 2017, effective 1 January 2018). Adding VAT (exclusive price → inclusive price): VAT = Price × 5% Total = Price × 1.05 Examples: AED 1,000 → VAT = AED 50 → Total = AED 1,050 AED 5,000 → VAT = AED 250 → Total = AED 5,250 AED 10,000 → VAT = AED 500 → Total = AED 10,500 Removing VAT (inclusive price → exclusive price): Net = Total ÷ 1.05 VAT = Total − Net = Total × (5/105) = Total ÷ 21 Examples: AED 1,050 → Net = AED 1,000 → VAT = AED 50 AED 5,250 → Net = AED 5,000 → VAT = AED 250 AED 10,500 → Net = AED 10,000 → VAT = AED 500 Quick check: If a price includes VAT, divide by 21 to get the VAT amount. AED 1,050 ÷ 21 = AED 50 (VAT) ✓ AED 5,250 ÷ 21 = AED 250 (VAT) ✓ Note: The UAE has one of the lowest VAT rates in the world. GCC comparison: UAE: 5% | Saudi Arabia: 15% | Bahrain: 10% | Oman: 5% | Qatar: Not implemented | Kuwait: Not implemented

What goods and services are zero-rated or exempt from UAE VAT?

UAE VAT has three treatments: Standard (5%), Zero-rated (0%), and Exempt. ZERO-RATED (0% VAT — supplier can recover input VAT): ✓ Exports of goods outside the UAE ✓ International services (where the customer is outside the UAE) ✓ International transportation of passengers and goods ✓ Certain healthcare services (preventive, basic medical treatment) ✓ Certain educational services (government curricula) ✓ Residential property — first supply of new building ✓ Crude oil, natural gas, and associated hydrocarbons ✓ Investment-grade gold, silver, platinum (99%+ purity) ✓ Air passenger transport (international routes) EXEMPT (no VAT — supplier cannot recover input VAT): ✗ Bare land transactions ✗ Local passenger transport (taxis, metro, buses) ✗ Financial services (loans, deposits, credit, insurance — with exceptions) ✗ Life insurance and life reinsurance ✗ Residential property — subsequent supply (resale, leasing) Key distinction between zero-rated and exempt: Zero-rated: The supply is taxable at 0%. The supplier can register for VAT and recover input VAT paid on related costs. Exempt: The supply falls outside the VAT system. The supplier cannot charge VAT but also cannot recover input VAT on costs related to exempt supplies. This is often worse than zero-rating for businesses. Example: A company selling financial products (exempt) cannot recover the VAT they paid on their office rent, software, or supplies used for those products. This is a 'hidden cost' of exemption.

When do I need to register for UAE VAT?

UAE VAT registration rules (Federal Tax Authority — FTA): MANDATORY registration threshold: AED 375,000 If your taxable supplies (standard + zero-rated) exceed AED 375,000 in the past 12 months OR are expected to exceed in the next 30 days — you MUST register. VOLUNTARY registration threshold: AED 187,500 You may choose to register if your taxable supplies are between AED 187,500 and AED 375,000. Why register voluntarily? ✓ Recover input VAT on purchases and expenses ✓ Appear more credible to VAT-registered business customers ✓ Issue valid tax invoices to clients who need them Non-resident suppliers: Must register if making taxable supplies in the UAE, regardless of threshold. Group registration: Related businesses under common control can register as a VAT group — treated as a single taxable person. Supplies between group members are outside the scope of VAT. Registration process: 1. Apply online at eservices.tax.gov.ae 2. Provide trade licence, passport/Emirates ID, financial records 3. Approval typically takes a few days to weeks 4. Receive Tax Registration Number (TRN) — 15-digit number Penalties for late registration: AED 20,000 for failure to register on time Interest and additional penalties on unpaid VAT De-registration: Can apply to deregister if taxable supplies fall below AED 187,500 for 12 consecutive months, or if the business ceases operations.

What is a valid UAE Tax Invoice?

A tax invoice is required for all standard-rated supplies between VAT-registered businesses. It is the document that allows your customer to recover input VAT. Full Tax Invoice — required for supplies over AED 10,000: ✓ Label 'Tax Invoice' clearly at the top ✓ Your name, address, and Tax Registration Number (TRN) ✓ Customer's name and address ✓ Customer's TRN (if they are VAT-registered) ✓ Sequential invoice number ✓ Date of issue ✓ Date of supply (if different from issue date) ✓ Description of goods or services ✓ Unit price (excl. VAT) ✓ Quantity ✓ Discount (if any) ✓ Total amount payable (excl. VAT) ✓ VAT rate applied ✓ VAT amount charged ✓ Total amount payable (incl. VAT) ✓ Currency (if not AED) Simplified Tax Invoice — allowed for supplies under AED 10,000: ✓ Label 'Tax Invoice' ✓ Your name and TRN ✓ Date of issue ✓ Description of supply ✓ Total payable and VAT charged Electronic invoices: Accepted by the FTA if they contain all required information. E-invoicing is increasingly required for government contracts. Credit notes: If you need to correct or cancel an invoice, issue a credit note referencing the original invoice number. This is required for VAT record-keeping. Record retention: Must keep all VAT records for 5 years (15 years for real estate records).

How does UAE VAT work for freelancers and sole traders?

Freelancers and sole traders in the UAE follow the same VAT rules as companies. Do you need to register? Check if your annual taxable supplies exceed AED 375,000: This includes: · All invoices issued to UAE clients for standard-rated or zero-rated services · Commissions and fees · Freelance project income Excluded from the threshold calculation: · Salary from employment (not considered a supply) · Exempt supplies · Out-of-scope activities If you provide services to overseas clients: Services to clients outside the UAE are typically zero-rated (exported services). These count toward your taxable turnover for registration threshold purposes but no VAT is charged to the client. If you are below the AED 375,000 threshold: · You cannot charge VAT to clients (no TRN = cannot issue tax invoices) · You cannot recover input VAT on your expenses · Consider whether voluntary registration (above AED 187,500) makes sense If you register: · Add 5% to all UAE client invoices · Collect VAT on behalf of the FTA · File VAT returns (usually quarterly) · Deduct input VAT you paid on business expenses · Remit the net VAT (collected minus paid) to FTA Filing frequency: Default: quarterly (every 3 months) Large businesses (turnover > AED 150M): monthly Deadline: 28 days after the end of the tax period

UAE VAT CALCULATOR — 5%

Calculate UAE VAT at 5% — add VAT to a price (exclusive → inclusive) or remove VAT from a price (inclusive → exclusive). Formula: add VAT: total = price × 1.05 | remove VAT: net = total ÷ 1.05. Three tabs: VAT Calculator (instant add/remove with net/VAT/total breakdown, split bar visualizer, formula...

VAT CALCULATOR

Calculate

Amount Excluding VAT (AED)

TOTAL (INCLUDING 5% VAT)

AED 1,050.00

Price (excl. VAT)AED 1,000.00

VAT (5%)AED 50.00

Total (incl. VAT)AED 1,050.00

FORMULA

× 1.05

VAT RATE

VAT OF NET

AED 50.00

LIVE DIAGRAM

TOTAL INCLUDING 5% VAT

AED 1,050.00

VAT: AED 50.00 · 5% of total

PRICE SPLIT

Net 95%

VAT 5%

Net: AED 1,000.00VAT: AED 50.00Total: AED 1,050.00

UAE VAT REFERENCE

Standard Rate

5%Most goods & services

Zero Rate

0%Exports, healthcare, education

Exempt

—Financial services, bare land

Reg. threshold

AED 375KAnnual taxable supplies

UAE VAT · Federal Decree-Law No. 8 of 2017 · 5% standard rate

Created with❤️byeaglecalculator.com

HOW TO USE

1
Choose your direction — Add VAT (enter price excluding VAT, get price including 5% VAT) or Remove VAT (enter a price that already includes 5% VAT, extract the VAT portion and the net price). Enter the amount in AED using the presets or type any value. Results show instantly: net price, VAT amount, and total price.
2
Switch to Invoice Builder to calculate VAT across multiple line items. Each line has description, quantity, unit price, and VAT type (5% Standard, 0% Zero-rated, or Exempt). Add as many rows as needed. The invoice totals at the bottom show subtotal (excl. VAT), total VAT, and grand total due. Useful for freelancers, SMEs, and procurement teams.
3
Switch to VAT Reference for a pre-computed table of VAT for 10 common amounts (AED 100 to AED 100,000) showing both add-VAT and remove-VAT in one table. Below it: a three-column guide to Standard (5%), Zero-rated (0%), and Exempt categories with examples, plus a key facts table (registration threshold, FTA, filing deadlines).

FREQUENTLY ASKED QUESTIONS

RELATED CALCULATORS

UAE End of Service Gratuity Calculator

Calculate instantly →

MORE UAE CALCULATORS

UAE End of Service Gratuity Calculator

Calculate instantly →

Was this calculator helpful?

UAE VAT Calculator · 5% standard rate · Federal Decree-Law No. 8 of 2017 · For guidance only — verify with FTA or a UAE-licensed tax professional