UAE VAT at 5 percent was introduced on January 1, 2018, and applies to virtually all construction materials, contracting services, and professional fees. Understanding how to correctly calculate and apply VAT is essential for every UAE construction business.
Our UAE VAT Calculator helps you instantly add VAT to a net amount, extract VAT from a VAT-inclusive total, or verify that VAT has been calculated correctly on any construction transaction.
How to Use This Calculator
- Enter the amount in AED — either the net amount or the VAT-inclusive total
- Select whether you want to add VAT, extract VAT, or verify
- Select the transaction type for reference
- Click Calculate for net amount, VAT amount, and total including VAT
🇦🇪 UAE Tip: Every UAE business with taxable supplies exceeding AED 375,000 per year must register for VAT. Submit VAT returns quarterly through the Federal Tax Authority portal at tax.gov.ae. Late submission penalty is AED 1,000 for first occurrence, AED 2,000 for repeat. Ensure all your suppliers provide valid tax invoices with their TRN number.
The Formula Explained
Adding VAT: Total = Net Amount x 1.05. Extracting VAT: Net = VAT-Inclusive Total / 1.05. VAT Amount = Total minus Net.
Frequently Asked Questions
What construction activities are VAT exempt in UAE?
The sale of bare land is exempt. The first supply of residential properties (new builds) is zero-rated. Most commercial property transactions and all construction services are standard-rated at 5%.
Do subcontractors charge VAT in UAE?
Yes, if they are VAT registered (annual turnover above AED 375,000). VAT-registered subcontractors must issue valid tax invoices showing their TRN. Main contractors can recover this VAT as input tax.
What is a UAE tax invoice?
A document issued by a VAT-registered supplier showing: TRN number, invoice date, description of goods or services, net amount, VAT rate and amount, total payable, and supplier details.
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