How to calculate VAT in the UAE
Quick answer
The UAE's standard VAT rate is 5%. To add it: multiply the amount by 1.05. To remove it from a VAT-inclusive total: divide by 1.05, do not simply subtract 5% - that overstates the pre-VAT amount and understates the VAT.
- 1Adding VAT: total = amount x 1.05.
- 2Removing VAT: pre-VAT amount = total / 1.05.
- 3VAT itself is the difference between the total and the pre-VAT amount.
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The UAE introduced a 5% VAT in January 2018, and it remains the standard rate for most goods and services. Adding it to a price is simple multiplication - the part that trips people up is going the other way: working out the pre-VAT amount from a price that already includes it.
Always verify the current rate and whether your specific goods or services fall under a zero rate or exemption with the UAE Federal Tax Authority before using a number for actual invoicing or filing - VAT treatment varies by category, and rates can change.
Step by step
To add VAT to a price
Multiply the pre-VAT amount by 1.05 (or by 1 plus whatever rate applies).
UAE VAT CalculatorTo remove VAT from a VAT-inclusive price
Divide the total by 1.05 to get the pre-VAT amount - do not subtract 5% directly from the total.
UAE VAT Calculator
Tips
- AED 1,000 plus 5% VAT is AED 1,050 - straightforward multiplication.
- AED 1,050 that already includes VAT breaks down to AED 1,000 pre-VAT and AED 50 VAT - not AED 997.50 pre-VAT, which is what wrongly subtracting 5% of 1,050 would give.
- Most UAE invoices show the VAT amount as its own line, precisely to avoid this kind of confusion for anyone checking the total.
Common problems
Subtracting 5% from a VAT-inclusive total gives a number that looks wrong.
VAT is calculated on the pre-VAT amount, not the total - dividing by 1.05 rather than subtracting 5% gives the mathematically correct pre-VAT figure.
Not sure whether VAT applies at all to a specific product or service.
The UAE has zero-rated and exempt categories alongside the standard 5% rate - check the current FTA guidance for your specific category rather than assuming the standard rate applies everywhere.
Frequently asked questions
- What is the current VAT rate in the UAE?
- The standard rate is 5%, in effect since January 2018. Some goods and services are zero-rated or exempt - check current FTA guidance for your specific case.
- How do I work out the pre-VAT price from a total that includes VAT?
- Divide the total by 1.05 (1 plus the VAT rate as a decimal). Subtracting 5% directly from the total gives the wrong answer.
- Is this official tax advice?
- No - this is a general calculation tool. Always confirm the correct treatment and current rate for your specific goods or services with the Federal Tax Authority or an accountant.
Related related tools
- UAE VAT CalculatorAdd or remove UAE VAT - 5% standard rate pre-filled, in AED.
- VAT / GST CalculatorAdd tax to a price, or pull it back out of a price that already includes it - using the right tax name and currency for your country.
- Invoice GeneratorFill in the details, watch the invoice build itself, then download a clean PDF.
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