UAE VAT Calculator – Add or Remove 5% VAT Instantly

How VAT Works in the UAE (Simple Guide)

Value Added Tax (VAT) was introduced in the UAE on 1 January 2018 at a standard rate of 5%. It is collected by businesses on behalf of the Federal Tax Authority (FTA) and applies to most goods and services sold in the country. Whether you are a shopper checking a receipt, a freelancer preparing a quotation, or a business owner issuing tax invoices, the two calculations you need most are adding VAT to a net price and removing VAT from a gross price. Our calculator does both — here is the logic behind it.

The two VAT formulas

1. Adding VAT (price is before tax):

VAT amount = Net price × 5% Total price = Net price × 1.05

Example: You quote a client AED 2,000 for a service. VAT = 2,000 × 0.05 = AED 100, so the invoice total is AED 2,100.

2. Removing VAT (price already includes tax):

Net price = Gross price ÷ 1.05 VAT amount = Gross price − Net price

Example: A supplier’s bill shows AED 3,150 including VAT. Net = 3,150 ÷ 1.05 = AED 3,000, so the VAT portion is AED 150.

A very common mistake is removing VAT by simply taking 5% off the gross amount. That gives the wrong answer — 5% of 3,150 is 157.50, not 150 — because the 5% was charged on the net figure, not the gross. Always divide by 1.05 to go backwards.

Who must register for VAT?

Registration is based on your taxable turnover over the previous 12 months (or expected in the next 30 days):

• Mandatory registration: taxable supplies above AED 375,000 per year.
• Voluntary registration: taxable supplies or expenses above AED 187,500 per year. Startups often register voluntarily so they can reclaim VAT paid on their costs.
• Below these thresholds, you cannot charge VAT at all — adding VAT to invoices without a TRN (Tax Registration Number) is illegal.

Registration is done online through the FTA’s EmaraTax portal.

Standard-rated, zero-rated and exempt — the difference

Not everything in the UAE carries 5% VAT:

• Standard-rated (5%): most goods and services — retail, restaurants, electronics, professional services, commercial rent, fuel.
• Zero-rated (0%): exports outside the GCC, international transport, the first supply of new residential buildings (within 3 years of completion), certain healthcare and education services, and investment-grade precious metals. Businesses still report these sales but charge 0% — and can reclaim input VAT.
• Exempt: local passenger transport (taxis, metro, buses), bare land, residential rent, and certain financial services. No VAT is charged and related input VAT generally cannot be reclaimed.

The zero-rated vs exempt distinction matters mainly to businesses: zero-rated suppliers recover their input VAT, exempt suppliers usually do not.

VAT invoices — what must be on them

If you are VAT-registered, a full tax invoice must show: the words “Tax Invoice”, your business name and TRN, the customer’s details, invoice date and number, a description of goods or services, the net amount, the VAT rate and amount per line, and the gross total. For supplies under AED 10,000 to unregistered customers, a simplified tax invoice is allowed.

Filing and payment

Most registered businesses file VAT returns quarterly through EmaraTax, within 28 days of the end of each tax period (large businesses may be assigned monthly periods). You pay the difference between the VAT you collected on sales (output tax) and the VAT you paid on purchases (input tax). Late filing and late payment both attract FTA penalties, so diarise your deadlines.

Quick reference

Situation	Calculation
Add 5% VAT to AED 1,000	1,000 × 1.05 = AED 1,050
Remove 5% VAT from AED 1,050	1,050 ÷ 1.05 = AED 1,000
VAT portion of AED 1,050 (inclusive)	1,050 − 1,000 = AED 50

Frequently asked questions

Is VAT in the UAE always 5%? The standard rate has been 5% since 2018. Some supplies are zero-rated or exempt, as explained above. Our calculator lets you change the rate in case you are working with a different percentage.

Do freelancers need to charge VAT? Only if they are VAT-registered. A freelancer whose annual taxable income exceeds AED 375,000 must register; between AED 187,500 and 375,000, registration is optional.

Can tourists get a VAT refund? Yes. Tourists can reclaim VAT on eligible purchases from registered retailers through the “Tax Refund for Tourists” scheme, validated at the airport before departure.

Is there VAT on residential rent? No — residential rent is exempt. Commercial rent, however, carries 5% VAT.

Is VAT the same as corporate tax? No. VAT (5%) is a tax on consumption, added to prices. UAE corporate tax (9% on business profits above AED 375,000) is a separate tax on company profits, introduced in 2023.

This guide is for general information only and is not tax advice. For official rulings, refer to the Federal Tax Authority (tax.gov.ae) or a registered tax agent.