VAT in the UAE
The UAE introduced value added tax at 5% in 2018. Most goods and services carry it, and businesses show prices either before or after VAT. This calculator works both ways: add VAT to a net price, or pull the VAT out of a total you were quoted.
The formulas
- Adding VAT. Total = amount x 1.05. VAT = amount x 0.05.
- Removing VAT. Net = total / 1.05. VAT = total minus net.
A common mistake is to take 5% off a VAT-inclusive total. On AED 31,500 that gives AED 1,575, but the actual VAT inside the total is AED 1,500.
VAT on property costs
| Cost | VAT |
|---|---|
| DLD 4% transfer fee | None |
| Agency commission | 5% |
| Trustee office fee | 5% |
| Bank valuation and arrangement fees | 5% |
| Residential rent | Exempt |
| Commercial rent and sale | 5% |
VAT rules for property have exceptions, especially for new builds and mixed-use buildings. Speak to a tax adviser for anything beyond everyday amounts.
Frequently asked questions
What is the VAT rate in the UAE?
The standard rate is 5%, in place since January 2018. Some supplies are zero rated or exempt.
Is there VAT on residential property in Dubai?
Residential rent and the resale of residential property are exempt or zero rated in most cases, and the first sale of a new home within three years of completion is zero rated. Commercial property is charged 5%.
How do I remove VAT from a price?
Divide the VAT-inclusive amount by 1.05. For AED 1,050 that gives AED 1,000 before VAT, so the VAT is AED 50.
Which property costs carry VAT?
Agency commission, trustee office fees, bank valuation and arrangement fees, and service charges paid by owners all carry 5% VAT. The 4% DLD transfer fee itself does not.