UAE VAT is a flat 5% — one of the lowest VAT rates globally — but knowing whether to add it or extract it from a price trips people up regularly. Here's both directions.
Price before VAT → Total price
Multiply the pre-VAT price by 1.05 (or multiply by 0.05 and add that to the original price).
| Item | Amount |
|---|---|
| Price before VAT | AED 1,000 |
| VAT (5%) | AED 50 |
| Total price | AED 1,050 |
Total price (VAT-inclusive) → Price before VAT
Divide the total price by 1.05 to find the pre-VAT amount, then subtract that from the total to find the VAT portion.
| Item | Amount |
|---|---|
| Total price (incl. VAT) | AED 1,050 |
| Price before VAT (÷ 1.05) | AED 1,000 |
| VAT portion | AED 50 |
Not everything is standard-rated
- Zero-rated (0% VAT, but still "in the system") — exports, international transport, some healthcare and education
- Exempt (no VAT, and not reclaimable) — certain financial services, residential property leasing (in most cases), bare land
- Standard-rated (5%) — most other goods and services
The difference between zero-rated and exempt matters mainly for businesses: on zero-rated supplies, you can still reclaim VAT paid on your own business costs, but on exempt supplies, you generally can't.
Add or remove VAT from any amount instantly.
Use the VAT Calculator →Registration threshold
Businesses with taxable supplies and imports exceeding AED 375,000/year must register for VAT; voluntary registration is available above AED 187,500. Below that, registration generally isn't required.
VAT treatment (standard, zero-rated, exempt) has detailed rules for specific goods and services. Verify the correct treatment for your specific transaction with the Federal Tax Authority or a UAE tax advisor.