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AE

Calculator

VAT Calculator

Add or remove VAT at 20%, 5% or 0% and see the net, VAT and gross figures side by side — with the reverse calculation most calculators get wrong.

Runs in your browser

Most goods and services, including most rent on commercial property.

VAT at 5%

AED 5.00

Net (excluding VAT)

AED 100.00

Gross (including VAT)

AED 105.00

The arithmetic

AED 105.00 ÷ 1.05 = AED 100.00 net
AED 105.00 − AED 100.00 = AED 5.00 VAT

Note what it is not: 5% of AED 105.00 is AED 5.25, which overstates the VAT by AED 0.25. The tax was charged on the net price, so the net price is what you have to divide back to. The shortcut: VAT is exactly 1/21 of any 5%-inclusive price (4.76%).

Registration threshold: AED 375,000.00

You must register for VAT once your turnover reaches AED 375,000.00 in taxable supplies and imports over the previous 12 months, or if you expect to pass it in the next 30 days. Voluntary registration is possible from AED 187,500.00. Registering voluntarily lets you claim back VAT on purchases, which is usually worth it if you sell mostly to other registered businesses and rarely worth it if you sell to consumers.

Zero-rated and exempt are different

Zero-rated sales carry VAT at 0%, and you can still claim back the VAT on related costs. Exempt sales — residential rent after the first supply, bare land, local passenger transport and some financial services — sit outside VAT entirely and block claiming it back on the costs of making them. This calculator handles rates, not that classification; check it before you invoice.

Source: Federal Tax Authority (FTA) — official VAT rates.

How to use

Pick a direction, type one number, and read the other two. Remove starts from a VAT-inclusive total and splits it into net and tax — that is the receipt and expense-claim case. Add starts from your price before tax and gives you the figure to invoice. Choose the rate that applies to what you're selling or buying; the 5% standard rate is right far more often than not.

The working is shown as arithmetic rather than just a result, so you can check it or repeat it without the tool.

Removing VAT: divide, don't subtract

This is the calculation the tool exists for, and the one hand arithmetic gets wrong. Take a AED 120.00 total at 5%:

  • Correct: AED 120.00 ÷ 1.05 = AED 114.29 net, so VAT = AED 120.00 − AED 114.29 = AED 5.71.
  • Wrong: 5% of AED 120.00 = AED 6.00, which overstates the tax by AED 0.29 and understates the net by the same amount.

The reason is that 5% was never applied to AED 120.00. It was applied to AED 114.29, and the total is what came out. To undo a multiplication you divide by the same factor, which is why 1.05 — not 5% — is the number that appears in the sum. The shortcut worth memorising: at 5% the tax is exactly 1/21 of any VAT-inclusive total.

Adding VAT: the easy direction

Multiply by 1.05. A AED 250.00 fee becomes AED 262.50 on the invoice, of which AED 12.50 is VAT you are collecting rather than earning. Nobody miscalculates this one — but plenty of new traders quote AED 250.00 to a customer, forget they must now add tax to it, and end up absorbing AED 12.50 out of their own margin because the price was already agreed. If you have just registered, re-check your published prices before your first invoice, not after.

Which rate applies

  • Standard rate — 5%. Most goods and services, including most rent on commercial property.
  • Zero rate — 0%. Exports, international transport, certain education and healthcare, the first supply of new residential property, and investment-grade precious metals.

Zero-rated is not the same as exempt

Both mean the customer pays no VAT, so they look identical from the buyer's side. For a seller they are entirely different, and the distinction decides whether you can reclaim tax on your costs:

  • Zero-rated supplies carry VAT at 0%. They count toward your registration threshold, they belong on your VAT return (filed through EmaraTax), and you can claim back the VAT on the costs of making them. Exports, international transport, certain education and healthcare, the first supply of new residential property, and investment-grade precious metals.
  • Exempt supplies — residential rent after the first supply, bare land, local passenger transport and some financial services — sit outside the system. You generally cannot claim back the VAT on the costs behind them.
  • Out of scope is a third category again, covering things like statutory fees and genuinely non-business activity.

A greengrocer selling zero-rated food can register and claim back the tax on their van and their rent. A landlord or a lender making exempt supplies generally cannot. Same zero on the customer's bill, opposite consequences for the business.

Where this fits with your other numbers

  • Putting it on paper. A compliant invoice needs the net, the VAT per rate, the gross and your Tax Registration Number (TRN). Build one with the invoice generator rather than retyping the layout each time.
  • What actually reaches you. VAT passes through your business; your own income is what's left after it and after tax. If you pay yourself a salary, check your take-home pay so you are planning around the net figure rather than turnover.
  • Set the money aside. The tax you collect is not yours to spend. Holding a quarter's worth in a separate account is the cheapest cash-flow discipline there is.

Tips and common mistakes

  • Never subtract the rate from a gross figure. Divide by 1.05. The wrong method is off by AED 0.29 on AED 120.00 and scales with the amount.
  • Split mixed receipts by rate. A supermarket total combining food and household goods cannot be unpicked with one division — the VAT line on the receipt is the only reliable figure.
  • Don't treat gross turnover as revenue. The tax element was never yours, and the return will ask for it whether you kept it or not.
  • Round at the invoice, not at every step. Rounding each line to the penny then summing can leave you a penny or two off; that is normal and not worth chasing.
  • Check the rate, not just the sum. The arithmetic is trivial; picking the wrong rate for a product is the error that actually costs money. When unsure, look it up with Federal Tax Authority (FTA).

Frequently asked questions

How do I remove VAT from a total?

Divide by 1 plus the rate, not by subtracting the rate. At 5%, AED 120.00 ÷ 1.05 = AED 114.29 net, so the VAT was AED 5.71. Taking 5% off the total instead gives AED 114.00, which is wrong by AED 0.29 — the tax was charged on the net figure, so the gross is the wrong base to apply the rate to.

How do I add VAT to a price?

Multiply by 1 plus the rate. AED 250.00 × 1.05 = AED 262.50, of which AED 12.50 is VAT. This direction is the easy one — it is only the reverse that trips people up.

Why isn't 5% of the total the VAT?

Because 5% was applied to the price before tax, not to the price including it. On AED 120.00, the tax element is AED 5.71 — exactly 1/21 of the total, which is the shortcut worth remembering. 5% of the total would be AED 6.00, overstating it by AED 0.29 on every single line. Over a year of expense claims that adds up to a real reconciliation problem.

What are the current VAT rates?

Standard rate 5%, Zero rate 0%. The 5% standard rate covers most goods and services. Rates are published by Federal Tax Authority (FTA); if in doubt about which applies to a particular product, check there rather than assuming.

What is the difference between zero-rated and exempt?

Zero-rated sales carry VAT at 0% — you charge none, but you can still claim back the VAT on the costs behind them. Exempt sales (residential rent after the first supply, bare land, local passenger transport and some financial services) sit outside the system: no VAT is charged and you generally cannot claim back the VAT on your related costs. The customer pays nothing either way, which is why the two get confused, but for the seller they are very different.

Can I use this to check a receipt or invoice?

Yes — that is the main use. Enter the total, pick the rate, and compare the VAT figure to the one printed on the document. If they differ, the usual explanations are mixed rates on one bill (a shop receipt with both food and non-food), a rounding convention applied per line rather than per invoice, or a genuine error. A penny or two of difference on a multi-line invoice is normal; more than that is worth querying.

Do I have to register for VAT?

Compulsorily, once your turnover reaches AED 375,000 in taxable supplies and imports over the previous 12 months, or if you expect to pass it in the next 30 days. You can register voluntarily below the threshold, which is worth doing if your customers are mostly VAT-registered businesses and you have VAT on costs to reclaim, and not worth doing if you sell to consumers.

Does the VAT I charge belong to me?

No. You are collecting it on the authority's behalf and it is due to be paid over, minus the VAT you have paid on your own purchases. Treating the gross receipts as revenue is the single most common way a small business creates a cash-flow crisis for itself — the money in the bank is not all yours. Set the tax element aside as it comes in.

Does the calculator handle several lines at different rates?

Not in one pass — run each rate separately and add the results. That is also how a compliant invoice has to present them: a VAT subtotal per rate rather than one blended figure, because blending loses the information the return needs.

Is what I type sent anywhere?

No. The arithmetic runs in your browser. Nothing you enter — prices, totals, or anything else — leaves your device or reaches us.

Not financial advice

This tool provides estimates for general information only and is not financial, tax, or legal advice. Figures may not reflect the latest rules — verify with GPSSA, MOHRE, MoF, CBUAE, RERA and FTA before making decisions.
  • Everything you type or open here is processed by your own browser. It is not sent to us and we could not read it if we wanted to.
  • Formatted for United Arab Emirates (en-AE), in AED.

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