Quick answer: Net VAT = output VAT on your sales − input VAT on your purchases. With 250,000.00 AED of sales, 10,000.00 AED of returns and 120,000.00 AED of purchases before VAT, you owe 12,000.00 AED − 6,000.00 AED = 6,000.00 AED.
How it's calculated
Pick VAT exclusive if your figures are before VAT, or VAT inclusive if they already contain it. Most accounting reports show sales before VAT, but till receipts and card statements usually include it.
Enter the period's sales taxed at 5%. If you gave customers refunds or credit notes, turn on Include returns and enter them too. The VAT on what's left is your output VAT.
Then enter purchases you hold a valid tax invoice for, with any returns to suppliers under their own switch. The VAT on those is your input VAT. If the net comes out negative, you have a credit rather than a bill.
To check a single price instead of a whole period, use the the UAE VAT calculator.
Worked examples
- Sales 250,000.00 AED, returns 10,000.00 AED, purchases 120,000.00 AED, all before VAT: 12,000.00 − 6,000.00 = 6,000.00
- The same sales and purchases entered including 5% VAT: 12,500.00 − 6,000.00 = 6,500.00
- Sales 120,000.00 AED and purchases 250,000.00 AED (a heavy buying month): 6,000.00 − 12,500.00 = -6,500.00 (credit)
What goes in each box
Output VAT is the 5% you charged customers. Zero-rated sales, such as exports outside the GCC, and exempt sales go on the return too, but they carry no VAT, so they don't change the amount you owe and you can leave them out here.
Input VAT is the 5% you paid suppliers on business costs. You can only claim it with a proper tax invoice, and not on everything: VAT on entertaining clients, on cars available for private use and on personal spending usually can't be recovered.
Filing and paying in the UAE
Most businesses file quarterly, though the FTA puts some on monthly periods. The return and the payment are due by the 28th day after the period ends, and both go through EmaraTax.
The FTA charges fixed penalties for late returns and percentage penalties for late payment. The amounts have been revised over the years, so check the current schedule on the FTA site rather than relying on an old figure.
Frequently asked questions
What's the difference between output VAT and input VAT?
Output VAT is what you charge on your sales. Input VAT is what you pay on your purchases. The return is simply output minus input: you pay the difference, or claim it back if input is bigger.
What happens if my input VAT is more than my output VAT?
You have a credit. You can ask the FTA for a refund or carry it forward to reduce the next return. Refund claims are often checked before they're paid, so keep your invoices handy.
My sales figure already includes VAT. What do I do?
Switch to "VAT inclusive". The calculator then takes 5/105 of each amount as VAT instead of adding 5% on top.
How do returns and credit notes change my VAT?
A refund to a customer reduces your output VAT for the period it's issued in. A credit note from a supplier reduces your input VAT. Both are entered as positive amounts here and subtracted for you.
Do I include zero-rated and exempt sales?
Not in this calculator. They're reported on the return but carry no VAT. One catch: if you make a lot of exempt sales, some of your input VAT may not be fully claimable, and that needs an apportionment your accountant can do.
Do I have to register for VAT in the UAE?
Yes, once your taxable supplies and imports pass AED 375,000 over 12 months. From AED 187,500 you can register voluntarily.
What about VAT on imports into the UAE?
Registered businesses normally use the reverse charge: the same amount goes in as both output and input VAT, so it nets to zero. Leave it out here unless you can't recover it in full.
Does this cover businesses in designated zones?
Only for supplies that are taxed at 5% in the normal way. Goods moving between designated zones can be outside the scope of VAT, so check those with your tax agent.