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VAT Calculator UAE — 5% Standard Rate (Add / Strip)

Add or extract UAE VAT at 5%. Divide by 1.05 to strip it, never subtract 5%, and see why zero-rated and exempt are not the same thing.

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AE flag

VAT — United Arab Emirates

5% standard rate

AED

Net (pre-tax)

AED 1,000

VAT amount

AED 50

Gross (incl. tax)

AED 1,050

AE flagUnited Arab Emirates: UAE introduced VAT at 5% in January 2018 — one of the lowest standard rates globally. Healthcare, education, certain residential real estate, and exports are zero-rated.

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About this tool

The VAT Arithmetic You Must Get Right

The most common mistake: you cannot remove VAT by subtracting 5%. If a bill is AED 105 including VAT, the VAT is not 5% of 105 (AED 5.25) and the net is not AED 99.75. The net is 105 ÷ 1.05 = AED 100, and the VAT is AED 5.

Why? Because the 5% was charged on the net price, not on the gross. The gross is 105% of the net, so you must reverse that multiplication by dividing by 1.05, not multiply by 0.95.

The Two Core Formulas

Adding VAT to a net price:

  • Net × 1.05 = Gross (including VAT)
  • Example: AED 100 × 1.05 = AED 105

Extracting VAT from a gross price:

  • Gross ÷ 1.05 = Net
  • Gross − Net = VAT amount
  • Example: AED 105 ÷ 1.05 = AED 100 net; AED 105 − AED 100 = AED 5 VAT

UAE VAT: 5% Standard Rate, Low by Global Standards

The UAE VAT standard rate is 5%, among the lowest in the world. Many businesses overlook VAT in pricing because 5% feels small, but on large invoices it is real money. Any business above the mandatory registration threshold must charge and remit it correctly. VAT paid on your own costs is reclaimable if you are registered, so the number that matters to a business is the net position across sales and purchases, not the headline rate. For the payroll side of running a UAE business, see the salary calculator.

Zero-Rated Is Not the Same as Exempt

This distinction decides real money for a business and is almost never explained clearly:

  • Zero-rated supplies are taxable at 0%, and the supplier can still reclaim input VAT on its costs. Exports, certain healthcare services, education, and some real-estate transactions are zero-rated.
  • Exempt supplies are outside the VAT system, and input VAT generally cannot be reclaimed. Insurance and certain financial services are typically exempt.

If your business makes zero-rated sales, you can reclaim VAT on your business costs even though you charge 0% to customers. This is a significant cash-flow advantage.

What This Tool Does — and What It Does Not

This calculator computes the arithmetic only. It does not determine whether a particular supply is standard-rated, zero-rated, or exempt, and it does not handle reverse-charge, designated-zone, or import scenarios. To confirm the VAT classification of your specific supply and filing obligations, consult the Federal Tax Authority or a tax adviser.

How to use the VAT Calculator UAE 🇦🇪

Takes about a minute. No signup, no download, your data stays in your browser.

  1. 1
    Open the tool. Scroll up to the VAT Calculator UAE 🇦🇪 above — it loads instantly in your browser, no install needed.
  2. 2
    Enter your values. The fields come pre-filled with realistic defaults so you can see how it works — replace them with your own numbers.
  3. 3
    Read the result. The output updates instantly. Copy or share it — nothing is uploaded to a server, everything stays on your device.

Frequently asked questions

Common questions about the VAT Calculator UAE 🇦🇪.

How do I remove VAT from a price?

You cannot remove VAT by subtracting 5%. Divide the gross amount by 1.05 instead. Example: AED 105 including VAT ÷ 1.05 = AED 100 net. The VAT is AED 105 − AED 100 = AED 5. This works because VAT was charged on the net price, so the gross is 105% of the net.

What is the VAT rate in the UAE?

The standard VAT rate in the UAE is 5%, one of the lowest in the world. While this might seem small, it represents real money on larger invoices. Businesses exceeding the mandatory registration threshold must charge and remit VAT. Some supplies are zero-rated (exports, healthcare, education) or exempt, which have different implications for input VAT recovery.

What is the difference between zero-rated and exempt supplies?

Zero-rated supplies are taxable at 0%, and the supplier can still reclaim input VAT on costs, offering a cash-flow advantage. Exempt supplies are outside the VAT system entirely, and input VAT generally cannot be reclaimed. Examples: exports and healthcare are typically zero-rated, while insurance and certain financial services are exempt.

Do I need to charge VAT?

If your business revenue exceeds the mandatory registration threshold, you must register for VAT and charge 5% on standard-rated supplies. Some supplies are zero-rated or exempt, requiring different handling. Your registration status and specific supply classification determine your obligations. Confirm with the Federal Tax Authority or a tax adviser to ensure compliance.

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