Short answer: The UAE standard VAT rate is 5%. Some supplies are zero-rated at 0%, and some are exempt. Zero-rated and exempt both produce no VAT on the sale, but they are treated differently for input VAT recovery.
The standard rate: 5%
UAE VAT launched on 1 January 2018 at a standard rate of 5%. Most goods and services fall here: general trading, professional services, restaurant meals, electronics, furniture and many consumer products. If you are unsure, start with the standard rate and confirm the treatment of your specific supply.
Zero-rated supplies: 0%
Zero-rated supplies are taxable at 0%. The supplier does not charge VAT to the customer, but the supply is still within the VAT system. A registered business may be able to recover input VAT linked to those supplies, subject to the rules.
Common examples include exports of goods and services, international transport, certain qualifying investment gold, and some healthcare or education supplies in specific circumstances. The details matter: a supply that looks like an export can fail the conditions if the documentation is incomplete.
Exempt supplies
Exempt supplies are outside the VAT system. No VAT is charged, but input VAT recovery is generally restricted. Common examples include certain healthcare services, certain education services and residential rent. Do not automatically treat every clinic, school or landlord as exempt; the exact service and the customer can change the answer.
Zero-rated vs exempt at a glance
- VAT charged to customer: 0% for zero-rated, no VAT for exempt.
- VAT return: zero-rated supplies are usually reported as taxable supplies at 0%; exempt supplies are reported separately.
- Input VAT: recovery is generally more favourable for zero-rated supplies, but restrictions apply; exempt supplies usually restrict recovery.
- Invoice: show the correct rate and a clear description so the treatment is auditable.
How to use the calculator for each rate
The UAE VAT calculator has quick buttons for 0% and 5%, plus a custom rate box. Use 0% when you are checking the arithmetic of a zero-rated line. Use 5% for standard supplies. Use Custom only when you are deliberately working with another rate, such as a different GCC country.
Do not use the calculator to decide whether a supply is exempt. That is a tax-classification question. The calculator only does the arithmetic once you know the rate.
Do UAE VAT rates change?
The 5% standard rate has been stable since 2018, but tax rules and thresholds can change. Check the Federal Tax Authority and your tax adviser before filing. This page is a plain-English guide, not a replacement for the law.
Frequently asked questions
What is the standard VAT rate in the UAE?
The standard rate is 5%. It has applied since VAT launched on 1 January 2018.
What is the difference between zero-rated and exempt?
Zero-rated supplies are taxable at 0% and may allow input VAT recovery. Exempt supplies are outside the VAT system and generally restrict input VAT recovery.
Are healthcare and education exempt in the UAE?
Certain healthcare and education supplies are exempt, but the exact service and circumstances matter. Confirm the treatment for your supply with a UAE tax adviser.
Is residential rent exempt from UAE VAT?
Residential rent is generally exempt, while commercial rent is normally standard-rated. Check the specific property and lease.
Calculate 0% or 5% VAT
Use the rate buttons and see the receipt breakdown instantly.
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Published 2026-10-30 by Wafa Smart Tech, Lahore. This is general information, not legal, tax or financial advice. Confirm current rules with the relevant authority or a qualified professional.