Calculate UAE VAT in Seconds — Add, Remove, or Check Registration
The UAE VAT rate is 5%, governed by Federal Decree-Law No. 8 of 2017 and administered by the Federal Tax Authority (FTA). Use this calculator to add VAT to a net price, extract VAT from a gross price, or check whether your business needs to register.
Enter an amount above to calculate VAT.
Total value of standard-rated and zero-rated supplies over the preceding 12 months. Exempt supplies do not count.
How UAE VAT Works
UAE Value Added Tax (VAT) is a 5% consumption tax levied on most goods and services, introduced by Federal Decree-Law No. 8 of 2017 and administered by the Federal Tax Authority (FTA). VAT applies to each stage of the supply chain, with businesses collecting VAT on sales (output tax) and reclaiming VAT paid on purchases (input tax).
| Operation | Formula | Example (AED 1,000) |
|---|---|---|
| Add VAT (net → gross) | Gross = Net × 1.05 VAT = Net × 0.05 | VAT = 1,000 × 0.05 = AED 50 Gross = 1,000 + 50 = AED 1,050 |
| Remove VAT (gross → net) | Net = Gross ÷ 1.05 VAT = Gross − Net | Net = 1,000 ÷ 1.05 = AED 952.38 VAT = 1,000 − 952.38 = AED 47.62 |
VAT Registration Thresholds
Under Federal Decree-Law No. 8 of 2017, businesses must register for VAT when their taxable supplies exceed specific thresholds:
- Mandatory registration: AED 375,000 in taxable supplies/imports over the preceding 12 months, or expected within the next 30 days.
- Voluntary registration: AED 187,500 — businesses above this threshold but below the mandatory threshold may choose to register voluntarily (useful for reclaiming input VAT on purchases).
- What counts: Standard-rated (5%) and zero-rated supplies count toward the threshold. Exempt supplies do not count.
- Resident vs. non-resident: Resident businesses register based on the above thresholds. Non-resident businesses making taxable supplies in the UAE must register regardless of threshold (with limited exceptions).
Zero-Rated vs. Exempt Supplies
Not all supplies in the UAE are taxed at 5%. The Federal Decree-Law No. 8 of 2017 and its Executive Regulations define three categories:
- Standard-rated (5%): Most goods and services — the default rate. Examples: electronics, restaurant meals, consulting services, retail purchases.
- Zero-rated (0%): Specific exports of goods and services, international passenger transport, certain educational and healthcare services, and other categories defined in the Executive Regulations. Zero-rated means 0% VAT is charged, but the business can still reclaim input VAT on related purchases.
- Exempt: Specific financial services, bare land residential property, certain local passenger transport. Exempt means no VAT is charged, but the business cannot reclaim input VAT on related purchases.
[VERIFY]: The complete list of zero-rated and exempt categories has been amended since 2017. Confirm against the latest VAT Executive Regulations at tax.gov.ae before relying on specific category classifications for your business.]
Common Mistakes to Avoid
- Assuming everything is 5%: Some supplies are zero-rated or exempt. Misclassifying can lead to overcharging customers or failing to charge VAT when required. [VERIFY specific categories against current Executive Regulations.]
- Confusing turnover with taxable supplies: The registration threshold is based on taxable supplies (standard-rated + zero-rated), not total turnover including exempt supplies. Exempt-only businesses don't need to register regardless of revenue.
- Not reclaiming input VAT: Registered businesses can reclaim VAT paid on business purchases (input tax). Many small businesses miss this and absorb VAT costs unnecessarily.
- Adding VAT instead of removing it: If a price already includes VAT (common in B2C retail), use the "remove VAT" formula (÷ 1.05), not "add VAT" (× 1.05). Adding VAT to an already-inclusive price overcharges the customer.
Accuracy & Limitations
This calculator performs standard-rate 5% VAT math only. It does not:
- Determine whether a specific supply is standard-rated, zero-rated, or exempt
- Calculate input tax recovery on mixed-use purchases (partially business, partially private)
- Handle reverse-charge VAT on imports of services
- Account for VAT grouping or special scheme adjustments
- Calculate penalties for late filing or late payment
Not a fit for:Businesses unsure whether their specific supply is zero-rated, exempt, or outside scope should not rely on this calculator alone. Direct them to the FTA's VAT guide at tax.gov.ae or consult a tax agent registered with the FTA.
For actual VAT registration, return filing, or classification questions near the thresholds, consult a licensed UAE tax agent or accounting firm.
Key Rules at a Glance
- Governing law: Federal Decree-Law No. 8 of 2017
- Regulator: Federal Tax Authority (FTA)
- Standard VAT rate: 5%
- Mandatory registration: Taxable supplies ≥ AED 375,000 (preceding 12 months)
- Voluntary registration: Taxable supplies ≥ AED 187,500
- Add VAT formula: Gross = Net × 1.05 | VAT = Net × 0.05
- Remove VAT formula: Net = Gross ÷ 1.05 | VAT = Gross − Net
- Zero-rated: 0% charged, input VAT reclaimable
- Exempt: No VAT charged, input VAT NOT reclaimable
- Effective from: 1 January 2018
Frequently Asked Questions
Is VAT included in the price I see in UAE shops?
Yes. In the UAE, retail prices displayed to consumers (B2C) are generally VAT-inclusive — the 5% VAT is already included in the displayed price. If you see an item priced at AED 100, the net amount is AED 95.24 and the VAT is AED 4.76. For B2B transactions, prices are often quoted net (excluding VAT), with VAT added separately on the invoice.
Do I need to register for VAT if I'm a freelancer?
Freelancers are subject to the same registration thresholds as any other business. If your annual taxable supplies (freelance income from standard-rated and zero-rated services) exceed AED 375,000, you must register. If they exceed AED 187,500, you may voluntarily register. Below AED 187,500, registration is not required. Freelancers in the UAE who hold a freelance permit from a free zone should confirm their VAT treatment with a tax agent.
What's the difference between zero-rated and exempt?
Zero-rated means 0% VAT is charged on the sale, but the business can still reclaim input VAT paid on related purchases. Exempt means no VAT is charged on the sale, but the business cannot reclaim input VAT on related purchases. This is a critical difference for businesses: zero-rated is generally beneficial (you get refunds), while exempt creates irrecoverable input VAT costs.
Can I voluntarily register below AED 375,000?
Yes, if your annual taxable supplies exceed AED 187,500. Voluntary registration allows you to reclaim input VAT on business purchases, which can be beneficial for businesses with significant costs (e.g., equipment, rent). However, voluntary registrants must comply with all VAT obligations: filing returns, maintaining records, and charging VAT on taxable supplies.
How do I reclaim input VAT?
Input VAT is reclaimed by reporting it in your periodic VAT return (typically quarterly). You deduct total input VAT (VAT paid on business purchases) from total output VAT (VAT collected on sales). If input VAT exceeds output VAT, you receive a refund from the FTA. If output VAT exceeds input VAT, you pay the net amount to the FTA. You must retain valid tax invoices for all input VAT claims.
What happens if I don't register when I should?
Failing to register for VAT when your taxable supplies exceed the AED 375,000 threshold can result in penalties from the FTA, including late registration penalties and backdated VAT liabilities. The FTA may also audit your business. It is important to monitor your taxable supplies regularly and register before exceeding the threshold.
Is there a difference between VAT and corporate tax?
Yes. VAT (Federal Decree-Law No. 8 of 2017) is a 5% consumption tax on goods and services, collected by businesses on behalf of the FTA. Corporate tax (Federal Decree-Law No. 47 of 2022) is a 9% tax on business profits (income), paid by the company itself. A business may need to register for both VAT and corporate tax — they are separate taxes with different registration thresholds, filing requirements, and payment schedules. Use our UAE Corporate Tax Calculator to estimate your corporate tax liability.
Related Tools & Resources
UAE Corporate Tax Calculator
Calculate 9% corporate tax liability under Federal Decree-Law No. 47 of 2022
UAE Gratuity Calculator
Calculate end-of-service gratuity under UAE Labour Law Article 51
Browse Tax & Accounting Services
Find verified tax agents, VAT registration services, and accountants in the UAE
List Your Tax Business
Are you a tax agent or accounting firm? List on BusinessFinder.ae
This calculator and its content are based on Federal Decree-Law No. 8 of 2017 on Value Added Tax, issued via the Federal Tax Authority (FTA). This tool calculates standard-rate 5% VAT only and does not constitute legal or tax advice. For specific classification questions, registration decisions, or filing requirements, consult a licensed UAE tax agent or visit tax.gov.ae.
[VERIFY: Confirm the current, complete list of zero-rated and exempt categories against the latest VAT Executive Regulations before relying on specific classifications — this list has been amended since 2017.]
Last Verified: [DATE — to be set before publishing]