What is the UAE VAT rate?

The UAE standard VAT rate is 5%, introduced on 1 January 2018 under Federal Decree-Law No. 8 of 2017. It is one of the lowest VAT rates in the world. Certain supplies are zero-rated at 0% (exports, international transport, qualifying healthcare and medicines, qualifying educational services, and the first supply of newly constructed residential buildings). Some supplies are exempt altogether — such as the resale of residential property, bare land, local passenger transport, and margin-based financial services. Exempt supplies carry no VAT and the supplier cannot recover input VAT on costs attributable to them.

How do I add VAT to a price in the UAE?

Multiply the net (pre-tax) price by 0.05 and add the result. For AED 1,000 net: VAT = AED 1,000 x 0.05 = AED 50; gross = AED 1,050. This calculator does that instantly and shows the full breakdown. For zero-rated supplies (0%), no VAT is added — the net and gross amounts are equal.

How do I remove VAT from a gross price?

Divide the gross price by 1.05 to recover the net amount. For AED 1,050 gross at 5%: net = AED 1,050 / 1.05 = AED 1,000.00; VAT = AED 50.00. Always divide by (1 + rate) — never multiply the gross by the rate and subtract, as that approach over-states the tax component on larger amounts.

Who must register for VAT in the UAE?

Businesses with annual taxable turnover exceeding AED 375,000 must register for VAT with the Federal Tax Authority (FTA). Voluntary registration is available for businesses with taxable turnover or expenses above AED 187,500 per year. Non-resident businesses making taxable supplies in the UAE with no established place of business must also register, regardless of turnover threshold. Tax registration numbers (TRN) are 15-digit numbers beginning with 100.

What are the penalties for incorrect VAT in the UAE?

The FTA imposes administrative penalties under Cabinet Decision No. 40 of 2017. Failure to register when required carries a penalty of AED 20,000. Late filing of a VAT return attracts a fixed penalty of AED 1,000 for the first offence (AED 2,000 for repeat). Under-declared tax is subject to a penalty of 50% of the unpaid amount. Businesses that issue incorrect invoices or fail to issue tax invoices face penalties of AED 5,000 per incorrect document. This calculator is for guidance only — consult a UAE-registered tax agent for compliance decisions.

Is this calculator accurate for all emirates?

Yes. UAE VAT is a federal tax and applies uniformly across all seven emirates — Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al-Quwain, Ras Al-Khaimah, and Fujairah. There are no emirate-level VAT variations. The standard rate is 5% throughout the UAE, with the same zero-rated and exempt categories applying in every emirate. All calculations run entirely in your browser and no data is transmitted to any server.

UAE VAT Calculator — Gera Tools

The UAE introduced Value Added Tax (VAT) on 1 January 2018 at a standard rate of just 5% — one of the lowest VAT rates anywhere in the world. Governed by Federal Decree-Law No. 8 of 2017 and administered by the Federal Tax Authority (FTA), UAE VAT applies uniformly across all seven emirates and has been in force now for over six years. Whether you are a freelancer quoting a client in Dubai, a business owner filing quarterly VAT returns in Abu Dhabi, a finance professional reconciling AED invoices, or a tourist trying to claim a VAT refund at the airport, knowing how to add and remove UAE VAT correctly is a practical daily skill.

This calculator handles both directions: Add VAT (net to gross) for when you know a pre-tax price and need the final VAT-inclusive amount your customer pays, and Remove VAT (gross to net) for when you have an invoice total and need to isolate the base amount and the tax component. It also covers zero-rated supplies at 0%, so you can confirm that no VAT applies to qualifying exports or healthcare transactions.

How UAE VAT works

UAE VAT is a consumption tax collected at each stage of the supply chain. Every VAT-registered business charges VAT on its taxable sales (output tax), deducts the VAT it paid on its own business purchases (input tax), and remits only the net difference to the FTA via a periodic VAT return (typically quarterly, or monthly for large businesses).

The UAE operates a two-rate system — not counting exempt supplies:

5% standard rate — the default for all supplies unless a specific relief applies. Covers most retail goods, restaurant meals, hotel stays, professional services, software licences, and utilities.
0% zero rate — the supply is still taxable so the supplier can recover input VAT, but the customer pays no VAT. Applies to: exports of goods and services outside the GCC Implementation Framework territory, international transport of passengers and goods, qualifying healthcare services and medicines, qualifying educational services provided by approved institutions, and the first supply of newly constructed residential buildings.
Exempt — outside the VAT system entirely; no VAT is charged and input VAT on related costs cannot be recovered. Covers the resale of residential property, bare land, local passenger transport within the UAE, and certain financial services provided on a fee/margin basis.

Worked example

A Dubai-based marketing agency invoices a UAE corporate client AED 10,000 net for a campaign at the 5% standard rate:

Line	Amount
Net (pre-VAT)	AED 10,000.00
VAT at 5%	AED 500.00
Gross (VAT-inclusive)	AED 10,500.00

The same agency receives a supplier invoice for AED 2,100 gross and needs to separate the VAT for input-tax recovery:

Line	Amount
Gross entered	AED 2,100.00
VAT 5% removed	AED 100.00
Net	AED 2,000.00

The removal formula is: net = gross / 1.05. Multiplying the gross by 0.05 and subtracting gives a slightly different (incorrect) result — dividing is always the right method.

UAE VAT rate table

Category	Rate	Typical goods and services
Standard	5%	Electronics, clothing, restaurants, hotels, professional services, software, vehicles, utilities, most retail
Zero-rated	0%	Exports outside GCC, international transport, qualifying healthcare and medicines, qualifying education, first supply of new residential buildings
Exempt	Exempt	Resale of residential property, bare land, local passenger transport, margin-based financial services

Rates are correct as of 2026 under Federal Decree-Law No. 8 of 2017 and its executive regulations. No changes to the standard rate have been announced since the original introduction in 2018.

This tool is for guidance only and is not tax advice. For transactions involving complex VAT treatment — cross-border supplies, partial exemption, designated zones, or group registration — always consult a UAE-registered tax agent or refer to the official FTA (federaltax.gov.ae) published guides.