How to Calculate VAT in the UAE

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Understanding Your VAT Calculator Results

VAT Amount: VAT Amount: The tax calculated based on the 5% VAT rate in the UAE. This shows the extra amount due to VAT.

Total Amount: After adding VAT, it’s what you pay or charge in total. When subtracting VAT, it’s the price before including VAT.

1. Adding VAT to a Net Price

To add VAT to a net price (the price before VAT), you can use the following formula:

Total Price=Net Price×(1+VAT Rate)

Example: If you have a net price of AED 100 and the VAT rate is 5% (0.05 as a decimal), the calculation would be:

Total Price= 100×(1+0.05)= 100×1.05= AED105

So, the price including VAT would be AED 105.

2. Subtracting VAT from a Gross Price

To find the net price (the original price before VAT was added) from a gross price (the total price including VAT), use this formula:

Net Price=Gross Price / (1+VAT Rate)​

Example: If your gross price is AED 105 and the VAT rate is 5%, the calculation would be:

Net Price= 105/1.05 = AED100

So, the original price before VAT was added is AED 100.

VAT Exemptions in the UAE

Category	VAT Exemption Details in the UAE
Exports	Goods or services sold outside the GCC are not subject to VAT.
Transportation	International transportation services, including for ships and airplanes, along with necessary supplies, are exempt from VAT.
Precious Metals	Sales of gold, silver, and other precious metals at 99% purity are VAT exempt.
New Homes	The first sale of a new residence within 3 years of its construction is not subject to VAT, aiding in homeownership.
Education and Healthcare	Certain approved education and healthcare services, including related goods and supplies, are exempt from VAT.