UAE Vat Calculator

This is a simple vat calculator to help you calculate your value added tax in United Arab Emirates.

UAE VAT Calculator

VAT Amount: AED 0.00

Total Amount: AED 0.00

In the UAE, businesses must register for VAT if they meet certain criteria. Here’s a summary of the VAT registration requirements:

VAT Registration Criteria

Mandatory Registration:

  • Annual Turnover: If your business’s taxable supplies and imports exceed AED 375,000 annually, you must register for VAT.
  • Government and Governmental Entities: These entities must register regardless of their turnover.

Optional Registration:

  • Annual Turnover: If your business’s taxable supplies and imports are between AED 187,500 and AED 375,000, you can opt for voluntary registration.

Threshold Calculation:

  • Past 12 Months: Calculate your turnover over the past 12 months.
  • Next 30 Days: Estimate if you will exceed the threshold in the next 30 days.

Exemptions and Special Cases:

  • Certain Activities: Some activities, such as those in education or healthcare, may be exempt or have different rules. Check specific exemptions to see if your business qualifies.

Registration Process:

  • Submit Application: Apply for VAT registration through the Federal Tax Authority (FTA) online portal.
  • Provide Documents: Prepare to submit required documents, such as trade licenses, bank details, and information about your business activities.

Compliance:

  • Maintain Records: Keep detailed records of your transactions and VAT-related documents.
  • File Returns: Submit regular VAT returns as required by the FTA.

Understanding these criteria helps ensure your business complies with UAE VAT regulations and avoids any penalties or issues.

How to Use the UAE VAT Calculator

The UAE VAT Calculator helps you easily determine VAT amounts and total costs when dealing with Value Added Tax in AED. Follow these steps to use the calculator effectively:

1. Enter Amount:

  • In the “Amount in AED” field, input the amount on which VAT is to be calculated. This is the initial cost before VAT.

2. Enter VAT Rate:

  • Input the VAT rate as a percentage in the “VAT Rate (%)” field. For instance, enter 5 for a 5% VAT rate.

3. Add VAT:

  • Click the “Add VAT” button to calculate the VAT amount and the total amount after VAT is added. The results will display the VAT amount and the total amount including VAT.

4. Remove VAT:

  • Click the “Remove VAT” button to determine the VAT amount if you know the total amount including VAT and need to find the base amount and VAT portion. The results will show the VAT amount and the base amount before VAT.

5. View Results:

  • The results section will display:
    • VAT Amount in AED: The calculated VAT based on the amount and VAT rate.
    • Total Amount in AED: The total amount after VAT has been added or the base amount if VAT is being removed.

Example Use Case:

  • If you want to calculate VAT on an amount of AED 1000 with a VAT rate of 5%, enter 1000 in the “Amount in AED” field and 5 in the “VAT Rate (%)” field. Click “Add VAT” to see that the VAT amount is AED 50 and the total amount becomes AED 1050.
  • If you have a total amount of AED 1050 and want to determine how much VAT was included if the VAT rate is 5%, enter 1050 in the “Amount in AED” field and 5 in the “VAT Rate (%)” field. Click “Remove VAT” to find out that the VAT amount is AED 50 and the base amount was AED 1000.

By following these steps, you can easily manage VAT calculations for various financial needs.

Here’s a consolidated overview of the UAE’s tax history under four headings:

1. Pre-VAT Era

Before the introduction of VAT in 2018, the UAE had no personal or corporate income taxes. Businesses operating in free zones enjoyed significant tax exemptions and benefits. The tax system was primarily limited to specific duties and fees, such as import duties, without a broad-based tax structure.

2. Introduction of VAT

On January 1, 2018, the UAE implemented a 5% VAT to diversify its revenue sources and reduce dependency on oil revenues. This move marked a significant shift in the UAE’s fiscal policy, introducing VAT on most goods and services, with some exemptions and zero-rated categories to accommodate essential items and sectors.

3. Tax Adjustments and Developments

The introduction of VAT led to initial administrative adjustments and compliance challenges for businesses. Since then, the UAE has made continuous improvements to VAT regulations, including digitalization efforts like electronic invoicing and streamlined filing processes to enhance efficiency and enforcement.

4. Current Tax Landscape

As of June 1, 2023, the UAE introduced a corporate tax rate of 9% for businesses with profits exceeding AED 375,000, marking a major shift in its tax policy. VAT remains at 5%, with ongoing reforms to align with international standards and adapt to economic changes, reflecting the UAE’s evolving fiscal strategy.

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