Key takeaways
- To remove VAT, divide the total by (1 + rate). Taking the rate off the total gives the wrong answer.
- At the UAE rate of 5%, the VAT inside a price is exactly 1/21 of the total (about 4.76%).
- AED 1,050 including 5% VAT is AED 1,000 before VAT plus AED 50 VAT.
- Round the VAT amount to the nearest fils at the end, not at each step.
On this page
The formula
If a price includes VAT at rate r:
- Price before VAT = total ÷ (1 + r)
- VAT amount = total − price before VAT, or total × r ÷ (1 + r)
For the UAE standard rate of 5%, that means dividing by 1.05. The VAT calculator does it in both directions and lets you change the rate.
Worked examples at 5%
| Total including VAT | Before VAT | VAT |
|---|---|---|
| AED 1,050.00 | AED 1,000.00 | AED 50.00 |
| AED 787.50 | AED 750.00 | AED 37.50 |
| AED 99.00 | AED 94.29 | AED 4.71 |
Check: 94.29 + 4.71 = 99.00. Work out the VAT from the unrounded figure (99 ÷ 1.05 = 94.2857…) and round once at the end.
The most common mistake
Taking 5% of the total gives the wrong VAT. On AED 1,050 it gives AED 52.50 instead of AED 50.00, because 5% of 1,050 includes VAT charged on the VAT. The VAT was added to the price before VAT, so it has to be removed by dividing, not by subtracting a percentage of the total.
Quick fractions for common rates
| VAT rate | Divide total by | VAT share of the total | Example |
|---|---|---|---|
| 5% (UAE, Oman) | 1.05 | 1/21 ≈ 4.762% | 1,050 → 1,000 + 50 |
| 10% | 1.10 | 1/11 ≈ 9.091% | 1,100 → 1,000 + 100 |
| 15% (Saudi Arabia) | 1.15 | 3/23 ≈ 13.043% | 1,150 → 1,000 + 150 |
| 20% (UK standard rate) | 1.20 | 1/6 ≈ 16.667% | 1,200 → 1,000 + 200 |
Rates change and some goods and services are zero-rated or exempt, so check the official tax authority for your country before relying on a rate.
When you need reverse VAT
- Expense claims and bookkeeping: receipts often show only a total, but input VAT has to be recorded separately.
- Setting shelf prices: if you want a round price of AED 99 including VAT, your net price is AED 94.29.
- Checking an invoice: a valid UAE tax invoice shows the VAT amount; reverse calculation confirms it matches the total.
The invoice generator shows net, VAT and total lines for you, and our guide to calculating UAE VAT covers adding VAT, rounding and registration thresholds. For other percentage questions, use the percentage calculator.
This article explains arithmetic and is not tax advice. For your obligations, consult the tax authority or a registered tax agent.
Sources
- UAE Federal Tax Authority: VATtax.gov.ae
- GOV.UK: VAT ratesgov.uk
- ZATCA (Saudi Arabia): Taxeszatca.gov.sa
Fact-checked against the sources above. We test every tool we mention. Editorial policy.
