UAE VAT calculator: add 5% to a net price

VAT in the UAE is charged at a standard rate of 5% on most supplies of goods and services. To add it, multiply the net (VAT-exclusive) price by 0.05 to get the tax, then add that tax to the net price. Multiplying the net price by 1.05 gives the same gross figure in one step.

Work out the tax per line and round each line to two decimal places (fils) before you total the invoice. Rounding only the final total can leave a one-fils difference against your customer's system, which is enough to make a reconciliation fail.

• VAT = net amount × 5%
• Gross amount = net amount × 1.05
• Round each line to the nearest fils, then add the lines

A design studio in Al Quoz bills a retail client for three items. Each line is worked out on its own and then summed, which is how the invoice in HelloBooks shows it as well.

• Brand identity package: net AED 12,400, VAT AED 620.00, gross AED 13,020.00
• Printed signage, 4 panels at AED 875 each: net AED 3,500, VAT AED 175.00, gross AED 3,675.00
• Courier to Abu Dhabi: net AED 65, VAT AED 3.25, gross AED 68.25
• Invoice total: net AED 15,965, VAT AED 798.25, amount due AED 16,763.25

The calculator assumes a standard-rated supply. Some supplies are zero-rated (for example, many exports of goods and services outside the GCC VAT area, international transport and certain education and healthcare services), some are exempt (such as certain residential property and local passenger transport), and some fall outside the scope of UAE VAT altogether. A supplier who is not registered for VAT must not charge it at all.

Reverse charge also changes the picture. When a registered business imports services from abroad, the overseas supplier does not add UAE VAT; the buyer accounts for it on its own VAT 201 return instead. If you are not sure which treatment applies, check the FTA guidance or ask a registered tax agent before you issue the invoice.

In HelloBooks you never type the 5% yourself. Each invoice line carries a VAT treatment (standard, zero-rated, exempt, out-of-scope or reverse charge), and the AI agent proposes the right one from the customer, the item and past invoices. It rounds per line, totals the invoice and posts the output tax to the VAT control account, ready for the VAT 201 working.

You stay in charge of the judgement calls. The agent flags a line it is unsure about, such as a sale to a customer with a non-UAE address, and waits for you or your accountant to confirm. If your business needs its own VAT codes or invoice layout, book a call at /book-a-demo and the team can set them up.