What is the standard VAT rate in the UAE?

The statutory standard VAT rate in the United Arab Emirates is 5%, implemented under Federal Decree-Law No. 8 of 2017 and administered by the Federal Tax Authority (FTA).

How do you remove 5% VAT from an inclusive UAE price?

To extract 5% VAT from a gross total, divide the gross amount by 1.05. The result is the pre-tax net amount, and the tax amount is Gross minus Net (or Gross × 5 ÷ 105).

What is the mandatory VAT registration threshold in the UAE?

A business must mandatorily register for VAT if its taxable turnover exceeds AED 375,000 over the previous 12 months. Voluntary registration is permitted at AED 187,500.

UAE 5% VAT Calculator: FTA Rules, Add/Remove Tax & Invoicing Guide

The United Arab Emirates introduced Value Added Tax on 1 January 2018 at a highly competitive statutory rate of 5%. Governed by the Federal Tax Authority (FTA), VAT applies across Dubai, Abu Dhabi, Sharjah, and all northern Emirates.

Whether reconciling commercial supplier invoices or calculating tax on retail purchases in UAE Dirhams (AED), our online VAT calculator executes instantaneous 5% calculations locally without server delays.

UAE Statutory VAT Schedule

Tier	Rate	Scope of Supplies
Standard Rate	5.0%	Commercial retail, dining, electronics, commercial property leases, consulting, vehicle purchases, hotel services.
Zero Rate (0%)	0.0%	Direct exports outside GCC implementing states (for cross-border Saudi trade, see our Saudi Arabia 15% VAT Guide), international passenger transport, crude oil, qualifying preventive healthcare.
Exempt Supplies	Exempt	Residential properties (leases after first 3 years), bare land, margin-based financial services, local passenger transport.

How to Calculate 5% UAE VAT

1. Adding 5% VAT (Exclusive to Inclusive)

To invoice commercial clients in the Emirates:

Add 5% Formula

Gross = Net × 1.05 | 5% VAT = Net × 0.05

Example: A marketing retainer of AED 10,000.00 Net:
• 5% VAT: AED 10,000.00 × 0.05 = AED 500.00
• Gross Total Due: AED 10,000.00 + AED 500.00 = AED 10,500.00

2. Removing 5% VAT (Inclusive to Exclusive)

To calculate the net base from a gross invoice or purchase receipt:

Remove 5% Formula

Net = Gross ÷ 1.05 | 5% VAT = Gross - Net

Example: An electronic device purchased for AED 2,100.00 Gross:
• Net Value: AED 2,100.00 ÷ 1.05 = AED 2,000.00
• Deductible VAT: AED 2,100.00 - AED 2,000.00 = AED 100.00

FTA Invoicing Requirements & Designated Zones

Under Article 59 of the Executive Regulation, registered businesses issuing tax invoices must include:

The words "Tax Invoice" displayed prominently.
Supplier's legal name, address, and Tax Registration Number (TRN).
Date of invoice issuance and sequential invoice number.
Description of goods or services, unit price, quantity, tax rate (5%), and net tax amount in AED.

Supplies transferred between approved Designated Zones (such as JAFZA or DAFZA) under customs suspension may qualify for special out-of-scope treatment under FTA regulations.

Frequently Asked Questions About UAE VAT

Are tourist purchases eligible for VAT refunds in the UAE?

Yes. Overseas tourists can claim a refund on 5% VAT paid on retail purchases made in the UAE via Planet Tax Free validation kiosks at Dubai International Airport (DXB) and other UAE border points.

When must the VAT 201 return be submitted?

VAT returns must be filed quarterly through the FTA EmaraTax portal no later than the 28th day following the end of the tax period.