A supplier in Al Quoz sends you a quote for AED 1,850 “plus VAT”. A customer in Sharjah asks what your AED 2,200 invoice looks like without the tax. Both questions land on the same desk ten times a week, and both get answered in seconds with this VAT calculator UAE. Type an amount, pick Add VAT or Remove VAT, and you’ll see the net figure, the VAT amount and the gross total, rounded to the fils.
VAT isn’t small money for the country either. The Federal Tax Authority’s 2025 annual report, published in June 2026, puts combined VAT and excise revenue at AED 46 billion for 2025, up from AED 41 billion the year before (Federal Tax Authority). Every dirham of that started as a calculation on someone’s invoice.
The calculator handles the arithmetic. The rest of this page handles the part most tools skip: which rate actually applies to your business, when 5% is wrong, and how the reverse charge, imports and the profit margin scheme change the numbers.
How does this VAT calculator UAE work?
Enter any amount in AED, keep the rate at 5% or change it, then choose Add VAT or Remove VAT. The tool returns the net amount, the VAT amount and the gross total instantly, with the exact formula shown underneath so you can check it yourself.
Adding VAT to a net price
Use this when you have a price before tax and need the amount to put on a quote or tax invoice. The calculator multiplies your figure by 1.05. AED 1,850 becomes AED 1,942.50, with AED 92.50 of VAT.
Removing VAT from a gross price
Use this when you’re holding a receipt or a VAT-inclusive price and need to know how much of it is tax. The calculator divides by 1.05. AED 2,200 inclusive works out to AED 2,095.24 net and AED 104.76 VAT.
That second calculation is where people slip. Taking 5% off AED 2,200 gives AED 2,090, which is wrong by AED 5.24. Small on one invoice, but it compounds across a quarter of sales and shows up as an under-declared or over-claimed figure on your return.
What the result boxes mean
- Net amount: the price before VAT, the figure that goes in the “amount” column of a tax invoice.
- VAT amount: the tax itself, always shown to two decimal places because the UAE rounds VAT to the nearest fils on each invoice line.
- Gross total: net plus VAT, the figure your customer actually pays.
- Scenario: the rate and treatment applied (standard, zero-rated, exempt, reverse charge, margin scheme or import), so the result always tells you what it assumed.
What is the VAT calculation formula in the UAE?
Adding VAT: multiply the net amount by 1.05. Removing VAT: divide the gross amount by 1.05. The VAT amount is the difference between the two figures. At 5%, VAT is exactly 1/21 of any VAT-inclusive price, which is 4.76%, not 5%.
Written out, the four formulas you’ll ever need at the standard rate are:
- Gross = Net × 1.05
- VAT (from net) = Net × 0.05
- Net = Gross ÷ 1.05
- VAT (from gross) = Gross × 5 ÷ 105, which equals Gross ÷ 21
Swap 0.05 for the applicable rate if you’re ever working with a different percentage, for instance when you’re pricing for a client in Saudi Arabia at 15%. The logic doesn’t change, only the number.
Rounding matters more than most people think. The Executive Regulations require VAT on a tax invoice to be rounded to the nearest fils, and we’ve seen returns questioned because a spreadsheet rounded at the total rather than per line. Anyone working out how to calculate VAT in the UAE by hand on a multi-line invoice should round each line first, then add the lines up.
Quick reference: common amounts plus VAT
Searches for “1100 plus VAT” or “2900 plus VAT” land here every week, so the table below covers the amounts people actually type.
| Net amount (AED) | VAT at 5% (AED) | Gross total (AED) | Same amount if it was gross: net (AED) | VAT inside it (AED) |
|---|---|---|---|---|
| 100 | 5.00 | 105.00 | 95.24 | 4.76 |
| 150 | 7.50 | 157.50 | 142.86 | 7.14 |
| 500 | 25.00 | 525.00 | 476.19 | 23.81 |
| 1,000 | 50.00 | 1,050.00 | 952.38 | 47.62 |
| 1,100 | 55.00 | 1,155.00 | 1,047.62 | 52.38 |
| 1,150 | 57.50 | 1,207.50 | 1,095.24 | 54.76 |
| 1,850 | 92.50 | 1,942.50 | 1,761.90 | 88.10 |
| 2,200 | 110.00 | 2,310.00 | 2,095.24 | 104.76 |
| 2,900 | 145.00 | 3,045.00 | 2,761.90 | 138.10 |
| 10,000 | 500.00 | 10,500.00 | 9,523.81 | 476.19 |
Who has to charge VAT in the UAE?
Any business whose taxable supplies and imports passed AED 375,000 in the last 12 months, or will pass it in the next 30 days, must register and charge VAT. Businesses between AED 187,500 and AED 375,000 can register voluntarily. Below that, you don’t charge VAT at all.
The thresholds haven’t moved since 2018, but what counts toward them trips people up. Zero-rated sales count. Exempt sales don’t. Reverse-charged purchases count. Salaries and dividends never do.
| Position | Registration | What it means for your invoices |
|---|---|---|
| Taxable supplies above AED 375,000 | Mandatory, within 30 days of crossing the line | Charge VAT, file returns, recover input VAT |
| Taxable supplies or expenses above AED 187,500 | Voluntary | Same obligations once registered; useful for startups with heavy setup costs |
| Below AED 187,500 | Not permitted | No VAT on invoices, no input VAT recovery |
A freelancer on AED 200,000 a year has a real choice here. Registering means charging clients 5% and quarterly filing, but it also means reclaiming VAT on a laptop, software and coworking rent. Most freelancers whose clients are VAT-registered companies benefit from registering; those selling to individuals usually don’t. Working out exactly where you sit against the VAT registration threshold is worth thirty minutes before you decide.
Late registration costs AED 10,000, and the fine applies whether you missed the threshold by a week or a year. If you’re near the line and unsure, the VAT registration services in Dubai team can run the 12-month test on your actual numbers.
Which VAT rate applies to your type of business?
Most UAE businesses charge 5% on everything they sell. But exporters, clinics, schools, residential landlords, banks and gold traders each sit under different rules, and the calculator’s scenario selector exists because 5% is the wrong answer for all of them.
The difference between zero-rated, exempt and out of scope isn’t academic. Two of the three let you recover input VAT on your costs; one doesn’t. Get the category wrong and you either overcharge customers or lose recoverable tax.
Standard-rated businesses: 5%
Retail, restaurants, consultancy, IT services, marketing agencies, construction contractors, commercial property leases, hotel stays and car rentals all charge 5%. Use Add VAT for quotes and Remove VAT for receipts. That’s the whole story for most registrants, and if that’s you, the top of this page is all you need.
Zero-rated businesses: 0% but still taxable
Zero-rated means you charge 0% VAT, show it on the invoice, and still recover the input VAT on your costs. It’s the best category to be in. Set the calculator’s scenario to “Zero-rated” and it will show VAT as nil while still producing a proper net figure for your invoice.
Exporters
Goods shipped outside the UAE, and services supplied to customers who are outside the UAE when the service is performed, are zero-rated provided you hold the export evidence. Since the November 2024 amendments to the Executive Regulations, customs declarations, shipping certificates or commercial evidence are all acceptable, which fixed a real headache for couriers and traders.
Healthcare and education
Preventive and basic healthcare, and education provided by government-recognised schools, nurseries and universities, are zero-rated. Cosmetic procedures, school uniforms sold separately and extracurricular trips aren’t. A clinic running both a GP practice and an aesthetics wing has two rates on one licence.
First supply of new residential property
A developer’s first sale or lease of a new home within three years of completion is zero-rated. Every resale or lease after that is exempt, which is a completely different outcome for input VAT. The residential property rules are the ones we’re asked about most by investors, and they’re worth checking before signing a sale agreement.
Investment precious metals
Gold, silver and platinum of 99% purity or higher, traded in a form recognised by bullion markets, are zero-rated. Jewellery isn’t. Since February 2025, B2B sales of jewellery to a VAT-registered buyer holding the required declarations fall under a domestic reverse charge instead; sales to consumers stay at 5%.
Exempt businesses: no VAT and no recovery
Exempt supplies carry no VAT and don’t count as taxable turnover. The catch is you can’t recover the input VAT on costs tied to them.
- Residential landlords: rent on a flat or villa (after the first supply) is exempt. VAT on the agent’s fee and maintenance is a cost, not a credit.
- Margin-based financial services: interest, currency exchange spreads and life insurance are exempt. Fee-based services like advisory or account fees are 5%.
- Bare land: selling undeveloped land is exempt. Selling land with a completed building on it isn’t.
- Local passenger transport: taxis, buses and the Metro are exempt.
Set the scenario to “Exempt” and the calculator returns the amount unchanged with VAT at nil. The full list of VAT exemptions in the UAE runs longer than this, and the edges (serviced apartments, mixed-use buildings, virtual asset transfers) are where professional advice earns its fee.
Out of scope and designated zones
Salaries, dividends, fines, genuine donations and transfers of a business as a going concern are outside VAT entirely. So are goods moving between Designated Zones, which are the 20-plus fenced free zones such as JAFZA, KIZAD and Dubai Airport Free Zone that the Cabinet lists for VAT purposes. Services in those zones are still taxed at 5%, a distinction that catches out new logistics firms every year. A regular free zone like DMCC or IFZA gets no special treatment at all.
| Business scenario | Rate | VAT on your invoice? | Recover input VAT? | Calculator mode |
|---|---|---|---|---|
| Retail, services, F&B, contractors | 5% | Yes | Yes | Standard, Add or Remove |
| Exporter of goods or services | 0% | Shown as 0 | Yes | Zero-rated |
| Clinic, school, nursery | 0% (qualifying supplies) | Shown as 0 | Yes | Zero-rated |
| Developer, first supply of new home | 0% | Shown as 0 | Yes | Zero-rated |
| Residential landlord (later supplies) | Exempt | No | No | Exempt |
| Bank, exchange house (margin income) | Exempt | No | No (partial for mixed) | Exempt |
| Importer of goods | 5% on landed value | Self-accounted | Yes | Import |
| Buyer of imported services | 5% self-charged | Self-accounted | Yes | Reverse charge |
| Electronics or jewellery wholesaler (B2B) | 5%, buyer accounts | No | Yes | Reverse charge |
| Used car or antiques dealer | 5% on margin only | Not shown separately | Limited | Profit margin |
| Goods between Designated Zones | Out of scope | No | Yes | Out of scope |
How do you calculate VAT under the reverse charge mechanism?
Under the reverse charge, the buyer calculates 5% on the purchase price and reports it as output VAT on their own return, then usually claims the same amount back as input VAT. The supplier doesn’t charge VAT at all. Net cash effect for a fully taxable business: zero.
The reverse charge mechanism exists so foreign suppliers don’t have to register here, and so high-value goods can’t be used for VAT fraud. Three situations trigger it.
Imported services
A Dubai agency paying AED 20,000 to a software company in Ireland must self-account for AED 1,000 of VAT in Box 3 of its return and recover it in Box 10. Choose “Reverse charge” in the calculator and it shows both figures. Miss the self-accounting step and the FTA treats it as an under-declared return, even though no tax was ultimately due.
Electronic devices, precious metals and jewellery
Two Cabinet Decisions moved certain domestic B2B sales onto the reverse charge. Cabinet Decision 91 of 2023 covers mobile phones, computers, tablets and their parts, effective 30 October 2023. Cabinet Decision 127 of 2024 covers gold, silver, platinum, palladium, diamonds, pearls, rubies, sapphires and emeralds, plus jewellery where those materials dominate the value, effective 25 February 2025 (UAE Legislation).
Both need the buyer to be VAT-registered and to hand over written declarations before the sale. Sell a batch of iPhones to a registered reseller with the declarations in place and you invoice without VAT; the reseller accounts for it. Sell the same batch to a walk-in customer and it’s a normal 5% sale. Anyone dealing in VAT on gold in the UAE should have this workflow built into their invoicing before the first trade.
Importing goods through customs
Import VAT is charged on the customs value plus customs duty plus any excise tax, not on the supplier’s invoice alone. A shipment with a customs value of AED 50,000 and 5% duty has a VAT base of AED 52,500 and import VAT of AED 2,625. Registered importers with a linked customs code self-account for this on the return; unregistered importers pay it at the port. The calculator’s “Import” mode asks for the customs value, duty rate and excise rate and does the layering for you.
How does the profit margin scheme change the calculation?
Under the profit margin scheme, VAT is charged only on the difference between what you paid for a second-hand item and what you sell it for, not on the full sale price. The VAT inside the margin is margin × 5 ÷ 105, and the tax invoice must not show VAT as a separate line.
Used car dealers in Al Aweer, antique traders and collectors’ item sellers use it constantly. Buy a car from a private owner for AED 40,000 and sell it for AED 46,000, and VAT is due on the AED 6,000 margin: AED 285.71. Account for VAT on the full AED 46,000 instead and AED 2,190.48 of it would go to the FTA rather than AED 285.71.
Three conditions apply. The goods must have been bought from an unregistered person, or from a dealer who also used the scheme, or with VAT that wasn’t recoverable. You must hold records of both the purchase and sale price. And the invoice must state that the margin scheme was applied. Sell at a loss and the VAT is simply nil for that item. Set the calculator to “Profit margin” and enter both prices; it returns the margin, the VAT and the net profit after tax.
How do you calculate the VAT you owe on a return?
Add up the output VAT you charged in the tax period, subtract the input VAT you paid on business costs, and the difference is what you pay the FTA. A negative figure is a credit you can carry forward or claim back. Returns and payment are due within 28 days of the period end.
The calculator works one transaction at a time. The return works in totals, and this is where the difference between input VAT and output VAT stops being theory. Here’s the sequence a bookkeeper follows every quarter.
- Total output VAT on standard-rated sales, split by emirate as the return requires.
- Add reverse-charge VAT on imported services and domestic reverse-charge purchases.
- Add import VAT pulled through from your customs declarations.
- Total recoverable input VAT on purchases supported by valid tax invoices.
- Apply the partial exemption ratio if you make both taxable and exempt supplies.
- Adjust for credit notes, bad debt relief and any capital asset scheme corrections.
- Pay the net, or carry forward or claim the credit.
Step 5 is the one banks, developers and clinics can’t skip. If 70% of your supplies are taxable and 30% exempt, only 70% of your shared overhead VAT is recoverable, unless you agree an alternative method with the FTA. Most registrants file quarterly; businesses with turnover above AED 150 million file monthly. If quarterly filing is eating your finance team’s time, VAT return filing services take the whole sequence off your desk.
What happens if you get the VAT calculation wrong?
The FTA’s penalty regime was rewritten by Cabinet Decision 129 of 2025, effective 14 April 2026. Late payment now accrues at 14% a year, calculated monthly. An incorrect return costs AED 500 the first time and AED 2,000 on repeat. A missing or wrong tax invoice costs AED 2,500 per case.
The new framework is cheaper than the old one for most honest mistakes. Late payment in particular used to cost 2% the day after the deadline, 4% after seven days and 1% a day after a month, capped at 300%. But it’s not free, and “the calculator said so” isn’t a defence if you picked the wrong scenario.
| Error | Penalty from 14 April 2026 |
|---|---|
| Registering late | AED 10,000 |
| Filing a return late | AED 1,000 first time, AED 2,000 if repeated within 24 months |
| Paying late | 14% per year on the unpaid amount, accrued monthly |
| Filing an incorrect return | AED 500 first time, AED 2,000 if repeated |
| Voluntary disclosure before audit | 1% per month on the tax difference |
| Failing to issue a tax invoice or credit note | AED 2,500 per case |
| Failing to keep records | AED 10,000, rising to AED 20,000 if repeated |
The full list of 2026 tax penalty changes runs to more than 20 items. Two practical points. First, a voluntary disclosure filed before the FTA notices is always cheaper than waiting. Second, e-invoicing in the UAE goes live for businesses with revenue above AED 50 million on 1 January 2027 and for everyone else on 1 July 2027, after which the tax invoice format and every VAT figure on it will be validated electronically before it reaches your customer. Calculation errors that used to sit quietly in a PDF will be flagged at source. Getting the scenario right now costs nothing; fixing it later won’t.
The tool above is free and needs no login. When your situation involves more than one rate, a mixed portfolio or a cross-border supply chain, a senior chartered accountant at Bestax will check the treatment before it reaches your return.
