UAE VAT calculator (5%)
The UAE standard VAT rate is 5%. To add VAT, multiply the net amount by 1.05. To find the VAT inside a total that already includes it, divide the total by 1.05 and subtract the result from the total. The VAT is rounded to the fils.
The two calculations
The FTA's VAT legislation sets the standard rate at 5%. Most construction services in the UAE are standard-rated.
| You have | Formula | Example on AED 100,000 |
|---|---|---|
| An amount before VAT | VAT = amount × 5% | VAT 5,000.00, total 105,000.00 |
| A total including VAT | Net = total ÷ 1.05 | Net 95,238.10, VAT 4,761.90 |
Construction is not a simple add-5% job
On a construction contract the hard part is not the rate but the timing and the base. Advance payments are taxed when invoiced, recoveries reduce later invoices, and VAT on retention falls due at the earliest of its payment, an invoice for it, or 12 months after sign-off. For those, use the payment certificate calculator and read the VAT guide for contractors.
Related tools
Use the gratuity calculator, final settlement calculator, overtime calculator, annual leave calculator, unpaid leave calculator, payment certificate calculator, retention calculator, advance recovery calculator, VAT calculator and the WPS file checker.
Worked example
A supplier quotes AED 42,000 including VAT. Dividing by 1.05 gives a net price of AED 40,000.00, so the VAT inside the quote is AED 2,000.00. If the quote had been AED 42,000 before VAT, the total would be AED 44,100.00.
Questions people ask
What is the VAT rate in the UAE?
5%, the standard rate.
How do I add VAT to a price?
Multiply the price by 1.05, or add 5% of it.
How do I remove VAT from a total?
Divide the total by 1.05; the difference is the VAT.
Is construction work subject to VAT in the UAE?
Construction services are generally standard-rated at 5%, with specific exceptions such as the first supply of certain residential buildings.
When is VAT due on a progress payment?
At the earliest of the invoice, the payment due date shown on it, or receipt of payment.
Does a payment certificate trigger VAT?
Not by itself, according to the FTA, though the due date it sets often does.
Is VAT charged on retention?
Yes, at the earliest of its payment, an invoice for it, or 12 months after the work is certified complete.
How is an advance payment taxed?
It is taxed when invoiced or received, and recovered against later invoices without being taxed again.
How is VAT rounded?
To the fils, two decimal places.
Does this calculator handle reverse charge?
No. It covers adding or removing the standard 5% rate.