How VAT is worked out
The standard rate of UAE VAT is 5%. To add it, multiply the price before VAT by 1.05: AED 1,000 becomes AED 1,050, of which AED 50 is VAT.
To find the VAT inside a VAT-inclusive price, multiply it by 5/105, which is the same as dividing by 21. The FTA’s own example: AED 220 including VAT holds AED 10.48 of VAT.
Prices advertised to consumers in the UAE must include VAT, on menus, price tags and catalogues alike. A price can be shown before VAT, clearly marked, to a VAT-registered customer or for exports. Not showing tax-inclusive prices where they are required carries a penalty of AED 5,000.
When there is no VAT to add
Zero-rated supplies carry VAT at 0%, and exempt supplies carry none, so the 5% does not apply to them. Not sure whether your business should be charging VAT at all? Use the VAT registration check.
Questions people ask
How do I calculate 5% VAT in the UAE?
Multiply the price before VAT by 0.05 for the VAT, or by 1.05 for the total. On AED 2,000 the VAT is AED 100 and the total AED 2,100.
How do I take VAT out of a price that includes it?
Divide the VAT-inclusive price by 21 to get the VAT, which is the same as multiplying it by 5/105. The rest is the price before VAT. On AED 1,050 the VAT is AED 50.
Do prices in the UAE have to include VAT?
Yes. Prices advertised for taxable supplies must include VAT. A price can be shown before VAT, clearly marked, for exports or when the customer is VAT-registered.
Can VAT be rounded?
Yes, to the nearest fils, which is what this calculator does.
A guide to the general rules, not tax advice for your business. Your figures stay in your browser: nothing you type here is sent to us unless you choose to message us.
