AE · reverse-tax
UAE VAT calculator: extract 5% from an inclusive price
For one supply confirmed as standard-rated at 5%, divide the inclusive amount by 1.05. Included VAT is 5/105 of the unrounded total, equivalent to 1/21; it is not 5% of that total.
Establish what the AED amount means
A UAE VAT calculator needs a clear starting-price basis. An amount before VAT needs tax added; an amount including VAT needs its tax component extracted. Choosing the wrong direction changes the answer even when the percentage is correct.
The UAE government’s VAT overview and the Federal Tax Authority’s standard-rate FAQ identify a 5% standard rate. The references were consulted on 19 October 2026. The examples below are conditional on that treatment having independently been established for the whole amount.
They do not determine registration, zero-rating, exemptions, imports, special schemes or additional charges. For an older transaction, establish the relevant date and treatment before comparing it with a current example.
Extract the base from a VAT-inclusive price
Assume AED 1,050 includes one tax at 5%. Dividing by 1.05 recovers the before-tax price:
Before VAT = 1,050 / 1.05 = AED 1,000.00
Included VAT = 1,050 - 1,000 = AED 50.00Enter 1050, 5 and Extract tax in the adjustable example. The calculator with tax also accepts manually established amounts and percentages. Selecting the UAE does not perform a transaction assessment.
Check the result by multiplying AED 1,000 by 5% and adding AED 50. This reconstructs the original AED 1,050 total. The check confirms the relationship between these inputs; it is not proof of the supply’s legal treatment.
Understand the fraction 5/105, or 1/21
The inclusive total represents 105 parts: 100 base parts plus five tax parts. Consequently, the exact unrounded tax fraction is 5/105, which simplifies to 1/21.
Multiplying AED 1,050 directly by 5% gives AED 52.50. Subtracting that amount would remove AED 2.50 too much, because the percentage has been applied to the larger inclusive total instead of its before-tax base.
| Scenario | Input | Rate | Before tax | Tax | Total |
|---|---|---|---|---|---|
| If one standard-rated 5% treatment applies | AED 1,050.00 | 5% | AED 1,000.00 | AED 50.00 | AED 1,050.00 |
| Rebuild the same before-VAT price | AED 1,000.00 | 5% | AED 1,000.00 | AED 50.00 | AED 1,050.00 |
| Smaller inclusive amount, manual convention | AED 100.00 | 5% | AED 95.24 | AED 4.76 | AED 100.00 |
The blue portion of the chart is approximately 4.76% of the total. It is not a different legal rate. The 5% input and the 4.76% displayed share describe different denominators.
Compare plus-VAT and inclusive quotes fairly
Under the same assumptions, a quote of AED 1,000 before VAT and a quote of AED 1,050 including VAT have the same total. A quote of AED 1,000 including VAT has a smaller net value.
On AED 1,000 inclusive, the unrounded base is approximately AED 952.38095. Under this manual tool’s net-first convention, the displayed base is AED 952.38 and tax is AED 47.62. Those two figures still sum to AED 1,000.
Do not add VAT again to an amount that already includes it. Likewise, do not remove VAT from an explicitly before-tax quote and then compare the result with a final payable amount. Record each quote’s basis before comparing prices.
Separate rounding from invoice and refund requirements
This manual tool rounds added tax half-up to two decimal places. On extraction it rounds the recovered base, then takes the difference as tax. It does not implement every tax-invoice, invoice-line or reporting rule.
A mixed receipt may contain amounts that cannot share one rate. Separate the relevant components first. Identifying a numerical VAT amount does not establish an input-tax deduction or a tourist refund, and reverse arithmetic is not a legal reverse-charge determination.
Use our methodology to inspect the calculation convention. The tool needs only an amount and percentage; do not submit identity documents, customer details or a receipt to calculate a conditional price breakdown.
Frequently asked questions
How do I extract 5% VAT from AED 1,050?
If the full AED 1,050 contains one confirmed 5% tax, divide by 1.05 to recover AED 1,000 before VAT. The included VAT is AED 50.
Why is the included VAT fraction 1/21?
The total has 100 before-tax parts plus 5 tax parts. The tax share is therefore 5/105, which simplifies to 1/21. The 5% rate applies to the base, not to the inclusive total.
Is 5% applicable to every UAE transaction?
No. Establish the supply's treatment first. Registration, zero-rating, exemptions, special arrangements and other charges are separate questions outside this manual calculator.
Is AED 1,000 plus VAT the same as AED 1,000 including VAT?
No. At the assumed 5% treatment, AED 1,000 plus VAT gives AED 1,050 total. AED 1,000 including VAT instead has a smaller before-tax base.
Does the calculation prove a tourist refund or input-tax entitlement?
No. A numerical tax component does not establish refund eligibility, vendor status or recoverability. Those require the applicable official requirements and transaction facts.
Manual example
Illustrative arithmetic only. Not an official tax rate.
- Amount before tax
- Tax amount
- Total
1000.00 + 50.00 = 1050.00
Open the full calculator