UAE VAT Calculator
Note: This calculator provides estimates based on standard VAT rates in the UAE. Actual tax obligations may vary based on specific circumstances and FTA regulations.
Last updated: May 2025 (Standard VAT rate: 5%)
🇦🇪 UAE VAT Calculator: Your Complete Guide to Calculating Value Added Tax in the United Arab Emirates
With the United Arab Emirates (UAE) moving toward a diversified economy, the introduction of Value Added Tax (VAT) in 2018 marked a historic shift. For businesses and consumers alike, understanding how to calculate VAT in the UAE is critical — not only for compliance but also for accurate pricing, invoicing, and financial planning.
This guide provides an in-depth overview of UAE VAT: how it’s calculated, when it applies, how to display it, and most importantly, how to use a UAE VAT Calculator to simplify the process.
🧾 What Is VAT?
Value Added Tax (VAT) is a consumption tax charged at every stage of the supply chain, where value is added — from production to sale. Unlike a sales tax (charged only at the final sale), VAT is charged on both goods and services at each transactional step.
📆 When Was VAT Introduced in the UAE?
VAT was introduced in the UAE on January 1, 2018 at a standard rate of 5%, as part of the GCC Unified VAT Agreement signed by Gulf Cooperation Council states. The UAE government implemented VAT to support infrastructure, education, and healthcare development.
📊 Current UAE VAT Structure
| Rate Type | Rate | Examples |
|---|---|---|
| Standard Rate | 5% | Electronics, retail products, hotel bookings |
| Zero-Rated | 0% | Exports, international air transport, certain healthcare & education |
| Exempt | N/A | Residential rent, certain financial services, bare land sales |
🏢 When Should a Business Register for VAT?
✅ Mandatory Registration:
If annual taxable turnover exceeds AED 375,000.
🟡 Voluntary Registration:
If turnover or expenses exceed AED 187,500.
🛑 Not Required:
If below the voluntary threshold and not importing taxable supplies.
Businesses must register with the Federal Tax Authority (FTA) and obtain a TRN (Tax Registration Number).
📲 What Is a UAE VAT Calculator?
A UAE VAT Calculator is a tool that helps:
Calculate VAT from net or gross prices.
Split total amount into VAT and base value.
Avoid manual errors in billing and filing.
It’s especially useful for:
Freelancers
SMEs
E-commerce sellers
Real estate agents
Accountants
🧮 How to Calculate VAT in the UAE
1. From Net to Gross
Example:
Net Price = AED 1,000
VAT = AED 50
Gross = AED 1,050
2. From Gross to Net
Example:
Gross Price = AED 1,050
Net = AED 1,000
VAT = AED 50
🧾 UAE Invoice Format with VAT
Each VAT-compliant invoice must include:
Supplier name & address
TRN
Invoice number & date
Description of goods/services
VAT amount
Total including VAT
Optional: Mention “Tax Invoice” at the top for clarity.
🔁 Reverse Charge Mechanism in the UAE
The Reverse Charge Mechanism (RCM) is used when:
Services or goods are imported from outside the UAE.
The recipient is responsible for accounting and paying VAT.
Common Use Cases:
Software purchased from US-based companies.
Consulting services from EU freelancers.
🛒 Real-World Examples: VAT Scenarios
📦 E-commerce Seller on Amazon UAE
Selling a product for AED 100
VAT @5% = AED 5
Final amount collected = AED 105
Seller pays AED 5 to FTA
🧑💻 Freelance Graphic Designer
Client invoice: AED 2,000
VAT = AED 100
Total = AED 2,100
VAT shown on invoice; freelancer remits it quarterly
📍 Mainland vs. Free Zone VAT Treatment
| Location | VAT Applies? | Note |
|---|---|---|
| Mainland | Yes | Fully VAT applicable |
| Designated Free Zone | Yes (limited) | Exempt in certain conditions |
| Non-designated Free Zones | Yes | VAT applies as usual |
FTA designates zones with special VAT rules — check the official FTA list.
🧾 How to File VAT with the FTA
Log into the FTA Portal
Navigate to “VAT” > “VAT Returns”
Fill in taxable sales, expenses, and VAT due
Review and submit
Pay VAT due via bank or eDirham
Deadlines:
Quarterly or monthly, depending on your FTA-assigned cycle.
🧑💼 B2B vs. B2C VAT in the UAE
| Buyer Type | VAT Treatment |
|---|---|
| B2B (with TRN) | May use reverse charge or invoice with 0% (if export) |
| B2C (UAE resident) | VAT at 5% is always added |
💸 How to Get VAT Refunds in the UAE
Businesses can reclaim VAT on expenses (if registered).
Tourists can get VAT refunds at airports via Planet kiosks.
Refunds processed within 20 days (in most cases).
🌐 VAT on International Transactions
Exports: Zero-rated
Imports: Reverse charge
Online Services: VAT may apply depending on customer location
Example:
A UAE-based company sells software to a US customer — 0% VAT applies if properly documented.
🛠️ UAE VAT Calculator Tool Example (Simple JS Logic)
📋 UAE VAT Summary Table
| Type | Formula |
|---|---|
| Net to Gross | Net × 1.05 |
| Gross to Net | Gross / 1.05 |
| VAT from Gross | Gross – (Gross / 1.05) |
| VAT from Net | Net × 0.05 |
✅ Best Practices for UAE Businesses
✅ Register with FTA if turnover > AED 375,000
✅ Issue VAT-compliant invoices
✅ Use accounting software with VAT tracking
✅ Reconcile input and output VAT
✅ File returns on time
✅ Train staff on VAT compliance
❓ UAE VAT Calculator – FAQs
Q1: Is VAT compulsory in the UAE?
Yes, for businesses exceeding AED 375,000 turnover annually.
Q2: Is there a free UAE VAT calculator online?
Yes, many are available or can be built using simple formulas.
Q3: What is the UAE VAT rate?
The standard VAT rate is 5%.
Q4: Do freelancers in UAE pay VAT?
Yes, if registered and crossing the turnover threshold.
Q5: Can tourists claim VAT refunds?
Yes, at departure points via Planet kiosks.
Q6: What is input VAT and output VAT?
Input VAT = VAT on expenses; Output VAT = VAT collected from sales.
Q7: What happens if you don’t pay VAT?
Fines up to AED 10,000 and penalties on unpaid VAT.
Q8: Are all Free Zones VAT exempt?
No, only designated zones have partial exemptions.
Q9: Is residential rent subject to VAT?
No, it’s exempt.
Q10: Can UAE businesses reclaim VAT on imports?
Yes, under the reverse charge mechanism.
