UAE VAT Calculator — Add or Remove 5% VAT (FTA)
Calculate UAE VAT at the standard 5% rate. Add VAT to net amounts or extract VAT from gross prices for invoicing and expenses.
The UAE introduced Value Added Tax on 1 January 2018 at a flat standard rate of 5% administered by the Federal Tax Authority (FTA). This is one of the lowest VAT rates globally. VAT applies to most goods and services in the UAE though certain supplies are zero-rated (exports outside GCC international transport healthcare education first sale of new residential property) or exempt (most financial services bare land residential lease). Businesses with taxable turnover above AED 375000 per year must register for VAT charge it on invoices and file quarterly returns. Voluntary registration is allowed above AED 187500. Our calculator handles both directions: adding 5% VAT to a net amount and extracting the 5% portion from a gross (VAT-inclusive) price.
How do I calculate 5% VAT from a gross price?
To extract 5% VAT from a VAT-inclusive price divide by 1.05. Example: AED 105 gross ÷ 1.05 = AED 100 net; VAT = AED 5. To add 5% VAT to a net price multiply by 1.05. A AED 10000 net invoice becomes AED 10500 gross with AED 500 VAT. Businesses registered for VAT can reclaim input VAT paid on business purchases by offsetting it against output VAT collected from customers. The net amount is remitted quarterly to the FTA via the EmaraTax portal. Consumers pay the VAT as part of the final price and cannot reclaim it.
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VAT Calculator (20%)
How Tax Calculation Works
Income tax is calculated on your total taxable income after deducting eligible exemptions and deductions from your gross income. The tax is applied progressively — you pay a lower rate on initial income slabs and higher rates only on income that exceeds each threshold. This means moving into a "higher tax bracket" does not mean your entire income is taxed at the higher rate. Understanding marginal vs effective tax rate is crucial: your marginal rate applies only to the last rupee earned, while your effective rate is the average across all slabs.
Tax-Saving Strategies
Under the old regime, maximize deductions: Section 80C allows up to Rs 1.5 lakh through PPF, ELSS, EPF, and life insurance. Section 80D covers health insurance premiums up to Rs 25,000 (Rs 50,000 for senior citizens). Section 80CCD(1B) offers an additional Rs 50,000 deduction for NPS contributions. Home loan interest up to Rs 2 lakh is deductible under Section 24. Under the new regime, the Rs 75,000 standard deduction and lower slab rates may save you more if your total deductions are below Rs 3.75 lakh. Calculate under both regimes before choosing.
Key Information
| Parameter | Details |
|---|---|
| Standard Rate | 5% (since 1 Jan 2018) |
| Mandatory Registration | AED 375000 turnover |
| Voluntary Registration | AED 187500 turnover |
| Return Filing | Quarterly |
Frequently Asked Questions
How do I calculate 5% VAT from a gross price?
To extract 5% VAT from a VAT-inclusive price divide by 1.05. Example: AED 105 gross ÷ 1.05 = AED 100 net; VAT = AED 5. To add 5% VAT to a net price multiply by 1.05. A AED 10000 net invoice becomes AED 10500 gross with AED 500 VAT. Businesses registered for VAT can reclaim input VAT paid on business purchases by offsetting it against output VAT collected from customers. The net amount is remitted quarterly to the FTA via the EmaraTax portal. Consumers pay the VAT as part of the final price and cannot reclaim it.
What is zero-rated vs exempt VAT in UAE?
Zero-rated supplies are technically taxable at 0% meaning the supplier can reclaim input VAT on related costs. Zero-rated items include: exports outside the GCC; international passenger and freight transport; first sale of new residential property (within 3 years of construction); investment-grade precious metals; healthcare services; basic education. Exempt supplies have no VAT charged and no input VAT recovery allowed: most financial services (interest margins); residential lease (tenant pays no VAT but landlord cannot reclaim input VAT); bare land sale; local passenger transport. Mixed businesses must apportion input VAT between taxable and exempt activities.
Who needs to register for UAE VAT?
Mandatory registration applies to businesses with taxable supplies and imports above AED 375000 in the previous 12 months or expected in the next 30 days. Voluntary registration is available from AED 187500 and can be useful for startups that want to reclaim input VAT on setup costs. Non-resident suppliers of digital services to UAE consumers must also register regardless of turnover. Registration is done through the EmaraTax portal with documents including trade licence Emirates ID of owners and expected revenue projections. Penalties for late registration are AED 10000.
Which tax regime should I choose — old or new?
Choose the new regime if your total deductions are below Rs 3.75 lakh. Choose the old regime if you claim HRA, 80C (Rs 1.5L), 80D, home loan interest, and NPS totaling more than Rs 3.75 lakh. Salaried employees can switch every year.
Is income up to Rs 12 lakh really tax-free?
Under the new regime for FY 2025-26, income up to Rs 12 lakh is effectively tax-free due to Section 87A rebate. After Rs 75,000 standard deduction, taxable income is Rs 11.25 lakh which qualifies for full rebate. However, income even slightly above Rs 12 lakh loses this entire benefit.
How can I save more tax legally?
Under the old regime, maximize 80C (Rs 1.5L via PPF, ELSS, EPF), 80D (Rs 25K-50K for health insurance), 80CCD(1B) (Rs 50K for NPS), HRA exemption, and home loan interest (Rs 2L under Section 24).
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Last updated: March 2026