VAT Rates in UAE
How much is VAT in UAE?
The standard value added tax (VAT) in UAE is 5%. It applies to most goods and services with a few exemptions.
Zero-rated supplies, or 0% VAT rate applies to goods and services which are exported outside the VAT-implementing Gulf Cooperation Council (GCC) member states. These include the supply of crude oil/natural gas, international transportation and some specific areas, like healthcare and education.
What is a VAT rate?
VAT (value added tax) is a type of consumption tax. The government in UAE applies it on the sale of goods and services.
VAT isn’t paid by businesses — instead, it’s charged to consumers in the price of goods, and collected by businesses, making it an indirect tax. Businesses are then responsible for reporting it to the government.
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How to work out VAT in UAE.
Total price including VAT
To work out the total price at the standard rate of GST (5%), multiply the original price by 1.05.
Total price excluding GST
You can calculate the total price excluding the standard GST rate (10%) by dividing the original price by 1.05
How does VAT work?
VAT is collected at each point in the production of goods — every time value is added and a sale is made. It’s designed to be paid by the consumer at the end. Here’s an example:
- A supplier sells a badminton racket to a shop for AED120. They owe AED20 VAT to the government.
- The shop pays AED120 but can claim the AED20 back from the government, so the shop doesn’t pay the VAT.
- The shop sells the racket to the customer for AED220. The GST is $44 which the customer, as the end-user, pays in full to the shop.
- Together with the reclaimable AED20 GST, the shop will end up paying AED24 to the government.
VAT Refund.
You may claim a refund on the 5% Value Added Tax paid on your purchases, If you make any purchase of more than AED250 (including VAT) at participating shops.
There are multiple ways of receiving the refund — either get paid immediately at a refund booth at the airport or send the approved form to a refund company.
How to get a VAT refund in 3 simple steps?
Application form
Get a Tax Refund Application Form from the retailer. You might also be asked to show your passport to check that you’re eligible.
Customs check
At customs, present your passport, VAT form(s), VAT invoice(s) and the tax-free goods.
Refund approved
If all the criteria is met, customs will approve your form. You’ll get a signed form that allows you to receive the refund.