How it works
The rate
The UAE charges value added tax at 5% on most goods and services, unchanged since VAT began on 1 January 2018. The Federal Tax Authority (FTA) administers it.
Adding VAT to a net price
The amount payable is the net price times 1.05:
- net 1,000 dirhams
- VAT: 1,000 × 5% = 50
- total: 1,050 dirhams
Extracting VAT from a total
When a price already includes VAT, divide by 1.05 to find the net, and the VAT is the difference:
- total 1,050 dirhams
- net: 1,050 ÷ 1.05 = 1,000
- VAT: 50 dirhams
Multiplying the total by 5% (52.50) is the common error; it overstates the tax.
Zero-rated and exempt supplies
Zero-rated at 0% with input tax recoverable: exports outside the GCC, international transport, the first supply of a new residential building within three years of completion, crude oil and gas, certain education and healthcare services, and investment-grade precious metals. Exempt with no input tax recovery: later supplies of residential property including rent, bare land, local passenger transport and some financial services. This calculator assumes the standard rate.
Who must charge VAT
Registration is mandatory once taxable supplies and imports exceed 375,000 dirhams in the previous twelve months or are expected to within the next thirty days; voluntary registration is open from 187,500 dirhams. Only registered businesses may charge VAT and issue tax invoices.
Frequently asked questions
What is the VAT rate in the UAE?
5% on most goods and services since 1 January 2018. Exports, international transport, the first supply of new residential property and some education and healthcare are zero-rated; later residential sales and rent, local passenger transport and bare land are exempt.
How do I take VAT out of a price that includes it?
Divide the total by 1.05. A bill of 105 dirhams is 100 dirhams of goods and 5 dirhams of VAT.
When must a business register for VAT?
When taxable supplies and imports exceed 375,000 dirhams in the past twelve months or are expected to in the next thirty days. Voluntary registration opens at 187,500 dirhams.
Can a tourist reclaim UAE VAT?
Yes, on eligible purchases from retailers in the Tax Refund for Tourists scheme, validated at departure. The refund is less a processing fee.