How do you extract 5% VAT from a gross price?

To extract the net amount before tax, divide the gross price by 1.05. To find the exact VAT amount, subtract the net price from the gross price, or multiply the gross price by (5 / 105).

Which goods and services are zero-rated or exempt from UAE VAT?

Zero-rated items (0% VAT) include exported goods and services, international passenger transport, qualifying investment precious metals, and first supply of residential buildings within 3 years. Exempt items (no VAT) include residential property leases, local passenger transport (metro/buses/taxis), and certain financial services.

Can tourists claim a refund on VAT paid in Dubai and the UAE?

Yes. Tourists aged 18 and older can claim an 85% refund of the VAT paid on eligible retail purchases when departing via Planet Payment tax-free kiosks at UAE airports, land borders, and seaports.

Federal Tax Authority Compliance Tool

UAE 5% VAT Calculator (2026)

Quickly compute 5% statutory Value Added Tax additions to net costs, or reverse-calculate and extract the pre-tax base amount and VAT fraction from gross commercial receipts in accordance with Federal Tax Authority (FTA) guidelines.

UAE 5% VAT Calculator

Add 5% statutory Value Added Tax or extract net amount from VAT-inclusive totals

Calculation Mode

Amount (AED)

VAT Percentage (%)

Net Amount (Excl. VAT)

AED 1000.00

5% VAT Portion

AED 50.00

Gross Total (Incl. VAT)

AED 1050.00

Understanding UAE 5% Value Added Tax (VAT)

Introduced on January 1, 2018 under Federal Decree-Law No. 8 of 2017 on Value Added Tax, VAT is an indirect consumption tax charged on the supply of most goods and commercial services at each stage of the production and distribution chain. As one of the lowest VAT rates globally, the UAE standard rate is fixed at 5%.

Statutory Mathematical Formulas

1. Adding 5% VAT to Net Base Price:

VAT Amount = Net Amount × 0.05

Gross Total = Net Amount × 1.05

2. Extracting VAT from Gross Total:

Net Base = Gross Total ÷ 1.05

VAT Amount = Gross Total - (Gross Total ÷ 1.05)

Tax Treatment Comparison Matrix (FTA Standards)

Category	Rate	Key Goods & Services Included
Standard Rated	5%	Electronics, clothing, dining, hotels, vehicle purchases, commercial leases, telecom services, fuel.
Zero-Rated (0%)	0%	Direct exports outside GCC, international passenger transport, qualifying investment precious metals (≥99% pure), basic education tuition, preventive healthcare consultations.
Exempt Supplies	No VAT	Residential property leases (unfurnished/furnished homes), local passenger transport (Dubai Metro, public buses, taxis), margin-based financial services, bare land.

Federal Tax Authority VerificationCalculations adhere strictly to executive regulations issued by the Federal Tax Authority (FTA). Registered businesses with taxable turnover exceeding AED 375,000 per annum must obtain a Tax Registration Number (TRN) and file quarterly VAT returns.

Frequently Asked Questions

Q: What is the standard VAT rate in the UAE?

A: The standard Value Added Tax (VAT) rate across all seven Emirates is strictly 5%, implemented under Federal Decree-Law No. 8 of 2017.

Q: How do you extract 5% VAT from a gross bill?

A: Divide the total price by 1.05 to reveal the pre-tax base, and subtract that figure from the total to identify the exact 5% VAT charge.

Q: Is residential rent subject to 5% VAT in Dubai?

A: No. Residential tenancy leases are classified as exempt supplies, meaning landlords cannot charge 5% VAT on tenant rental contracts.

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