UAE VAT calculator

UAE VAT is charged at 5 per cent on most supplies. The arithmetic is easy when you start from a price before tax. It is less easy when you start from a total that already includes the tax, and that is where most of the mistakes on UAE invoices and receipts come from. The calculator above does both, in dirhams, to the fils.

The standard rate of VAT is 5 per cent, set by Article 3 of the Federal Decree-Law on VAT. Federal Decree-Law No. 8 of 2017, Federal Tax Authority

Adding VAT to a price

When your price is before tax, the VAT is the price multiplied by 5 and divided by 100. Add it to the price and you have the total the customer pays. A fee of AED 1,000.00 carries AED 50.00 of VAT, for a total of AED 1,050.00.

Removing VAT from a total

When the figure you hold already includes VAT, such as a shelf price, a till receipt or a quote marked inclusive, you cannot simply take 5 per cent of it. The VAT inside a gross amount is: VAT = gross x rate / (100 + rate). At 5 per cent that is gross x 5 / 105, which is the same as dividing the gross by 21.

When to add and when to remove

• Add when you set your price before tax, which is how most business-to-business invoices are written
• Remove when the price was agreed or displayed including VAT, as in shops, restaurants and many consumer quotes
• Remove to check a supplier's invoice: the VAT shown should be the total divided by 21, give or take a fils
• If you are unsure, ask whether your number is what the customer actually pays. If it is, remove

Zero rated is not the same as exempt

Both show no VAT on the invoice, so to the buyer they look the same. They are not. A zero-rated supply is a taxable supply at 0 per cent: you still report it, and you can still recover the VAT you paid on the costs of making it. An exempt supply is outside the charge, and VAT on costs linked to it is generally not recoverable. Exports are the zero-rated case most businesses meet. Certain financial services, bare land and local passenger transport are typical exempt ones.

Zero-rated supplies are listed in Article 45 of the Decree-Law, and exempt supplies in Article 46. Federal Decree-Law No. 8 of 2017, Articles 45 and 46

Choose 0 per cent in the calculator for a zero-rated line. An exempt line should not carry a rate at all: describe it as exempt on the invoice instead, so nobody later mistakes it for a zero-rated sale.

Rounding to the fils

The calculator works in whole fils and rounds half up, once. In remove mode it rounds the amount before VAT and takes the VAT as whatever is left, so the two always add back to exactly the figure you typed. Rounding every invoice line separately and then adding gives a slightly different VAT total from working out the VAT on the subtotal. Pick one method, use it every time, and make sure the invoice adds up as printed.

What goes on the tax invoice

A calculator gives you the figures. The invoice has to carry them in the form the Executive Regulation sets out. A full tax invoice shows the words Tax Invoice, your Tax Registration Number, the customer's TRN where they are registered, a sequential invoice number, the date, a description of what was supplied, the amount before tax, the rate, the VAT charged and the total. If you invoice in dollars or any other currency, the VAT must also be stated in dirhams, with the exchange rate you used.

The contents of a tax invoice, including the tax amount in dirhams, are set by Article 59 of the Executive Regulation. Cabinet Decision No. 52 of 2017, Executive Regulation, Article 59

This page does the arithmetic and nothing more. It does not decide whether a supply is zero rated, whether you need to register, or what you owe for a period. Those depend on your facts, and the FTA's own guidance is the place to check them.