In short
- To add VAT, multiply by 0.05: AED 2,000 before VAT carries AED 100 and comes to AED 2,100.
- To take VAT out of a total, multiply it by 5 and divide by 105: AED 2,100 holds AED 100 of VAT.
- VAT is rounded to the nearest fils. On a full tax invoice the rounding is done line by line.
- A business registers above AED 375,000 of turnover in 12 months and may from AED 187,500.
In this guide
UAE VAT calculator: amount before VAT, VAT at 5% and total
- Amount before VAT
- AED 1,000.00
- VAT at 5%
- AED 50.00
- Total with VAT
- AED 1,050.00
UAE VAT calculator: the standard rate of 5%. Out of an amount that includes VAT, the tax is 5/105 of it.
One amount in dirhams goes in, with a choice of two: the amount is before VAT, or VAT is included. Three figures come out: the amount before VAT, the VAT at 5% and the total with VAT.
The tool counts at the standard rate of 5%, which Article 3 of the VAT law has set since 1 January 2018. It shows each figure to two decimals, the precision of one fils.
This online VAT calculator for the UAE fits a quote, a price list or a supplier's invoice at the standard rate. Sales at 0%, exempt sales and purchases from abroad have their own sections below.
The tax is charged by a business that holds a tax registration number. We file the application and every return after it: VAT registration in the UAE.
How to calculate VAT in the UAE: the VAT calculation formula in both directions
| What you know | VAT | The other figure |
|---|---|---|
| The amount before VAT | Amount × 0.05 | Total: amount × 1.05 |
| The total with VAT | Total × 5 ÷ 105 | Amount before VAT: total ÷ 1.05 |
Adding VAT: AED 2,000 before VAT
Multiply the amount by 0.05: AED 2,000 × 0.05 is AED 100.00 of VAT. Add it to the amount, and the total with VAT is AED 2,100.00.
Reverse VAT calculator: AED 2,100 with VAT
Divide the total by 1.05: AED 2,100 ÷ 1.05 is AED 2,000.00 before VAT. The difference, AED 100.00, is the tax. The short way to the tax alone is the total × 5 ÷ 105, which is the total divided by 21.
A common mistake is to take 5% of the total. 5% of AED 2,100 is AED 105, which is AED 5 too much: the tax inside a total is 5/105 of it, about 4.76%.
The second formula follows from the law. Article 34 takes the value of a sale as the payment less the tax, so the 5% is counted on the amount before VAT and never on the total.
The two formulas on five round amounts:
| Amount | Taken as before VAT: VAT and total | Taken as VAT included: VAT and amount before VAT |
|---|---|---|
| AED 100 | AED 5.00 and AED 105.00 | AED 4.76 and AED 95.24 |
| AED 500 | AED 25.00 and AED 525.00 | AED 23.81 and AED 476.19 |
| AED 1,000 | AED 50.00 and AED 1,050.00 | AED 47.62 and AED 952.38 |
| AED 5,000 | AED 250.00 and AED 5,250.00 | AED 238.10 and AED 4,761.90 |
| AED 10,000 | AED 500.00 and AED 10,500.00 | AED 476.19 and AED 9,523.81 |
VAT inclusive and VAT exclusive prices: which amount you start with
A price shown to the public includes VAT. Article 38 of the law says the advertised price of a taxable sale includes the tax, so a shelf price, a menu or a web shop for consumers gives the total.
The Executive Regulation allows a price without VAT in two cases: a sale for export, and a customer that is itself registered for VAT. The quote or the price list then states that its prices exclude the tax.
| Where the price stands | What it is | In the tool |
|---|---|---|
| Shelf, menu or web shop for consumers | The total with VAT | VAT included |
| Quote or price list marked as exclusive of VAT | The amount before VAT | Before VAT |
| Till receipt, a simplified tax invoice | The total, with the VAT inside it shown at the foot | VAT included |
| Full tax invoice | Each line before VAT, then the VAT and the total | Before VAT, line by line |
A fee agreed with no word on VAT is where a seller loses money. If the customer pays AED 2,000 and no more, AED 95.24 of it is VAT and AED 1,904.76 stays with the seller. Write the words plus VAT into the quote.
How VAT is rounded on an invoice: to the nearest fils
A dirham has 100 fils, so VAT is stated to two decimals. Article 61 of the Executive Regulation, as it stands in October 2026, lets a business round a fraction of a fils to the nearest fils. The rule is mathematical: half a fils and above goes up.
The Federal Tax Authority (FTA) adds one point in its clarification on tax invoices. A full tax invoice shows the tax of each line, so the rounding is done line by line.
Take an invoice with three lines of AED 12.88 before VAT. Five per cent of a line is AED 0.644, which rounds to AED 0.64. The invoice shows AED 38.64 before VAT, AED 1.92 of VAT and a total of AED 40.56. Five per cent of AED 38.64 in one go is AED 1.932, or AED 1.93: one fils more.
On a till receipt the prices include VAT, and the tax is taken out of the total. A receipt of AED 250.00 holds AED 11.90 of VAT, since 250 × 5 ÷ 105 is 11.9048.
The return follows the same unit: the FTA's guide to the return asks for every amount in dirhams, to the nearest fils.
What a tax invoice shows beside the amounts is in the guide to the tax invoice format in the UAE. From 2027 invoices between businesses travel as data: e-invoicing in the UAE starts on 1 January 2027 for the largest companies and on 1 July 2027 for the rest.
We do this for you VAT registration in the UAE from $350 a month with accounting
Which supplies carry 5%, 0% and no VAT
The tool counts at 5%, the rate of every sale that the law does not name as zero-rated or exempt. The table sets the treatments side by side on a sale of AED 10,000.
| Treatment | Sales the VAT law puts here | On AED 10,000 |
|---|---|---|
| 5%, the standard rate | Goods and services sold in the UAE: consultancy, software, office rent, goods sold from a free zone to the mainland | AED 500 of VAT, total AED 10,500 |
| 0%, zero-rated | Goods exported within 90 days with the customs papers; services to a customer abroad; international transport; the first sale or lease of a new home; listed education and healthcare | AED 0 of VAT, total AED 10,000 |
| Exempt | Residential rent and the resale of a home; bare land; local passenger transport; life insurance; financial services with no explicit fee | No VAT charged |
| Seller not registered | A business under the registration threshold that has not registered by choice | No VAT and no tax invoice |
Zero-rated and exempt sales both show no VAT to the customer, and they differ behind the invoice. A zero-rated sale is a taxable sale: it goes into the return, and the VAT on its costs is deducted. An exempt sale gives no right to deduct the VAT on its costs.
A designated zone is a fenced free zone on the Cabinet's list, and goods that stay inside it are treated as outside the UAE for VAT. Services supplied there carry the ordinary 5%, and so do goods used up in the zone or brought into the mainland: see the difference between a free zone and a designated zone.
Reverse charge on imported services: the buyer counts the 5%
A supplier abroad adds no UAE VAT to its invoice. When a registered UAE business buys a service from such a supplier, Article 48 of the law treats the buyer as selling the service to itself. The buyer works out the 5% and declares it in its own return.
A Dubai agency pays a foreign software company AED 20,000 for a year's subscription. In the tool the amount is before VAT, and the tax is AED 1,000.00. The agency enters AED 20,000 with AED 1,000 of output VAT in box 3 of the return, and the same AED 1,000 as input VAT in box 10.
The two entries cancel out for a business whose own sales are taxable: it pays nothing on this purchase. A business with exempt sales deducts less: if half of the subscription serves exempt sales, it deducts AED 500, and the other AED 500 is paid with the return.
Since 1 January 2026 the buyer no longer issues a tax invoice to itself for an imported service: it keeps the supplier's invoice. The conditions for deducting the tax are in input VAT recovery in the UAE.
How to calculate the VAT of a quarter: output VAT less input VAT
Each return sets two totals against each other. Output VAT is the tax on the sales of the period, with the reverse charge. Input VAT is the tax on purchases that the business may deduct. Article 53 of the law makes the payable tax the first less the second.
A consultancy closes the quarter from July to September 2026 with these figures.
| Line of the return | Amount before VAT | VAT |
|---|---|---|
| Sales at 5% (box 1) | AED 400,000 | AED 20,000 |
| Services to clients abroad at 0% (box 4) | AED 100,000 | AED 0 |
| Imported services, reverse charge (box 3) | AED 20,000 | AED 1,000 |
| Output VAT (box 12) | AED 21,000 | |
| Costs with 5% VAT (box 9) | AED 150,000 | AED 7,500 |
| Reverse charge deducted (box 10) | AED 20,000 | AED 1,000 |
| Input VAT (box 13) | AED 8,500 | |
| Net VAT to pay (box 14) | AED 12,500 |
The return and the AED 12,500 reach the FTA by the 28th day after the quarter, here 28 October 2026. When input VAT is the larger total, box 14 shows a credit. It is carried to the next return or claimed back, and a refund is claimed within five years.
Each figure comes from the books: the sales ledger, the purchase invoices and the import papers. We keep them and prepare the return as part of accounting in the UAE, from $350 a month.
Who must charge VAT and who may: AED 375,000 and AED 187,500
Registration becomes compulsory when the taxable turnover of the last 12 months, imports included, goes above AED 375,000, or is expected to within 30 days. The application follows inside 30 days. A business may register by choice from AED 187,500 of taxable turnover or of costs that carry VAT.
A consultancy that invoices AED 35,000 a month passes the threshold in its eleventh month: 11 × 35,000 is AED 385,000. Once registered, it adds 5% to its invoices and deducts the VAT on its costs.
Until then its price is the whole price. A business with no tax registration number adds no VAT, and the law makes anyone who collects an amount as tax pay it to the FTA. Before you pay VAT to a new supplier, check its number: TRN verification.
We watch the two thresholds for you, register the company on time and prepare each return.
