How UAE VAT Works
The UAE introduced Value Added Tax at 5% on 1 January 2018 under Federal Decree-Law No. 8 of 2017. It applies to most goods and services unless specifically zero-rated (e.g. exports, international transport) or exempt (e.g. bare land, local passenger transport).
Add VAT: Multiply the net amount by 1.05 to get the gross (VAT-inclusive) amount. The VAT portion is Net x 0.05.
Remove VAT: Divide the gross amount by 1.05 to extract the net. The VAT portion is Gross - (Gross / 1.05).
Businesses with taxable supplies exceeding AED 375,000 must register for VAT. Voluntary registration is available from AED 187,500. VAT returns are filed quarterly (or monthly for large taxpayers) through the FTA portal.
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