VAT Calculator UAE 2025

Calculate Value Added Tax (VAT) in the UAE. Our calculator helps you add or extract 5% VAT from any amount, making it easy to comply with UAE tax regulations.

UAE VAT Calculator

AED

Understanding VAT in the UAE

Value Added Tax (VAT) was introduced in the UAE on January 1, 2018, as part of a GCC-wide agreement. The standard VAT rate in the UAE is 5%, which is one of the lowest rates globally.

Key VAT Concepts

  • VAT is charged at 5% on most goods and services in the UAE
  • Some categories are either zero-rated or exempt from VAT
  • Businesses with annual taxable supplies over AED 375,000 must register for VAT
  • VAT returns must be filed periodically with the Federal Tax Authority (FTA)

VAT-Free and Zero-Rated Items

Certain goods and services in the UAE are either exempt from VAT or zero-rated:

  • Healthcare services and medicines
  • Educational services
  • Local passenger transport
  • Certain government services
  • Charitable organizations' activities
  • Some investment grade precious metals

VAT Calculations

There are two main ways to calculate VAT:

  • Adding VAT: Multiply the net amount by 1.05 to get the gross amount (including VAT)
  • Extracting VAT: Divide the gross amount by 1.05 to get the net amount (excluding VAT)
  • The VAT amount is the difference between the gross and net amounts

VAT Registration Requirements

Mandatory Registration

Businesses must register for VAT if their annual taxable supplies and imports exceed AED 375,000. Registration must be completed within 30 days of crossing this threshold.

Voluntary Registration

Businesses with annual taxable supplies and imports between AED 187,500 and AED 375,000 may voluntarily register for VAT to reclaim VAT on business expenses.

Benefits of Registration

  • Ability to reclaim VAT paid on business purchases
  • Improved business credibility
  • Compliance with UAE tax laws
  • Competitive advantage in B2B transactions

Practical VAT Examples

Example 1: Adding VAT to a Price

Product Price: AED 1,000 (before VAT)

VAT Amount = 1,000 × 5% = AED 50

Total Price = 1,000 + 50 = AED 1,050

Example 2: Extracting VAT from Total

Invoice Total: AED 2,100 (including VAT)

Net Amount = 2,100 ÷ 1.05 = AED 2,000

VAT Amount = 2,100 - 2,000 = AED 100

Example 3: Calculating VAT on Services

Service Fee: AED 5,000 + VAT

VAT = 5,000 × 5% = AED 250

Client Pays = 5,000 + 250 = AED 5,250

VAT Compliance Checklist

  • ✓Issue Tax Invoices: Include VAT registration number, tax invoice number, and date
  • ✓Maintain Records: Keep all VAT-related documents for at least 5 years
  • ✓File Returns on Time: Submit VAT returns quarterly or monthly as required
  • ✓Pay VAT Dues: Remit VAT collected to FTA within the specified timeframe
  • ✓Stay Updated: Monitor FTA announcements for regulation changes

Complete VAT Compliance Guide

Learn everything about VAT registration, filing requirements, penalties, and best practices for UAE businesses in our comprehensive guide.

Read VAT Compliance Guide →

VAT FAQs

Q: What happens if I don't register for VAT when required?

A: Failure to register for VAT when required can result in penalties up to AED 20,000, plus you'll need to remit uncollected VAT from the date you should have registered.

Q: Can I claim VAT on purchases made before registration?

A: Yes, under certain conditions. You may claim VAT on goods purchased up to 4 years before registration if still held, and on services within 6 months before registration.

Q: Do I need to charge VAT on exports?

A: Most exports of goods and services from the UAE are zero-rated for VAT, meaning you charge 0% VAT but can still reclaim input VAT.

Q: What's the penalty for late VAT return filing?

A: Late filing incurs penalties of AED 1,000 for the first offense and AED 2,000 for subsequent offenses. Late payment attracts additional daily penalties.

Common VAT Mistakes to Avoid

  • ⚠️ Not issuing proper tax invoices with all required details
  • ⚠️ Mixing up zero-rated and exempt supplies
  • ⚠️ Failing to charge VAT on taxable supplies
  • ⚠️ Claiming input VAT on exempt supplies
  • ⚠️ Missing filing deadlines
  • ⚠️ Inadequate record-keeping
  • ⚠️ Not updating VAT rates or regulations

Disclaimer: While this calculator provides accurate VAT calculations, businesses should consult with tax professionals and refer to the Federal Tax Authority (FTA) guidelines for specific VAT obligations and compliance requirements. This tool is for informational purposes only and should not be considered as professional tax advice.