How to Calculate 5% Value Added Tax in the UAE
The standard rate of Value Added Tax (VAT) in the United Arab Emirates is 5%, introduced on 1 January 2018 under Federal Decree-Law No. 8 of 2017. Whether you are an SME invoicing clients in Dubai or filing your quarterly VAT 201 return with the Federal Tax Authority (FTA), accurately calculating exclusive and inclusive amounts is essential.
Quick Formulas for UAE 5% VAT
- Adding 5% VAT (Price Excludes Tax):
Net Amount × 0.05 = VAT Amount|Net Amount × 1.05 = Total Gross Price - Removing 5% VAT (Price Includes Tax):
Gross Total ÷ 1.05 = Net Amount|Gross Total - Net Amount = VAT Amount
Common UAE Amounts and 5% VAT Breakdown
| Amount (AED) | 5% VAT Added | Total Price (Incl. VAT) | VAT Inside Inclusive Amount |
|---|---|---|---|
| AED 100 | AED 5.00 | AED 105.00 | AED 4.76 |
| AED 500 | AED 25.00 | AED 525.00 | AED 23.81 |
| AED 1,000 | AED 50.00 | AED 1,050.00 | AED 47.62 |
| AED 10,000 | AED 500.00 | AED 10,500.00 | AED 476.19 |
| AED 50,000 | AED 2,500.00 | AED 52,500.00 | AED 2,380.95 |
UAE Tax Invoice Requirements
According to the Federal Tax Authority (FTA), every registered taxable person making a taxable supply must issue a compliant Tax Invoice containing:
- The words "Tax Invoice" clearly displayed.
- Supplier's legal name, address, and Tax Registration Number (TRN).
- Recipient's name, address, and TRN (for B2B simplified or full tax invoices).
- A unique sequential tax invoice number and date of supply.
- Description of goods or services, unit price, quantity, rate of VAT (5%, 0%), and net amount in AED.
- Total gross amount payable in AED.
Streamline UAE VAT 201 Filing with Qeemah
Manually categorizing sales across standard supplies, zero-rated exports, and RCM imports can result in FTA audit fines. With Qeemah UAE VAT Software, your sales and expense transactions are automatically sorted into the exact boxes of the FTA Form 201 EmaraTax return, giving you full audit confidence with a single click.