Current VAT Rate in United Arab Emirates (2025)

Current VAT Rates

Historical VAT Rate Changes

• 2025: Current standard rate of 5%
• Historical data being compiled

• 2025: Current standard rate of 5% (no change)
• 2020: Temporary reduction during pandemic
• 2011: Rate increased from X% to Y%
• 2008: Temporary reduction during financial crisis
• 1991: VAT system introduced at X%

Economic Impact

VAT contributes approximately 20-30% to United Arab Emirates's total tax revenue. The current rate structure balances revenue generation with economic competitiveness within the Middle East region.

Zero-Rated Items

The following items are zero-rated for VAT in United Arab Emirates:

• Exports of goods and services
• International transportation
• Some basic food items
• Children's clothing (some countries)
• Books and newspapers (some countries)
• Prescription medications

• Exports of goods and services
• International transportation
• Basic food items (specific list varies)
• Children's clothing and footwear
• Books and newspapers
• Prescription medications

VAT Exempt Items

The following are exempt from VAT in United Arab Emirates (no VAT charged, no input VAT recovery):

• Financial services
• Insurance services
• Healthcare and medical services
• Education and training
• Postal services
• Charitable activities

• Financial services
• Insurance services
• Healthcare and medical services
• Education and training
• Postal services
• Charitable activities

Reduced Rate Applications

Items subject to reduced VAT rates in United Arab Emirates:

• No reduced rates apply in this country

VAT Registration

• Registration Threshold: Varies AED annual turnover
• Voluntary Registration: Available below threshold
• Registration Process: Online via tax authority website
• Processing Time: Typically 2-4 weeks

VAT Returns and Payment

• Filing Frequency: Varies
• Filing Deadline: End of month following period
• Payment Methods: Bank transfer, online payment
• Late Filing Penalties: Varies by amount and delay

Cross-Border Trade

Special considerations for international transactions:

• Intra-EU Trade: Not applicable (non-EU country)
• Imports: VAT payable at point of entry
• Exports: Generally zero-rated
• Digital Services: Special rules may apply

Nearby Countries

What is the current VAT rate in United Arab Emirates?

The standard VAT rate in United Arab Emirates is 5% as of 2025. This applies to most goods and services unless they qualify for reduced rates or exemptions.

How do I calculate VAT in United Arab Emirates?

To add VAT: multiply the net amount by 5%. To remove VAT from a gross amount: divide by 1.05. Use our calculator above for instant results.

Who needs to register for VAT in United Arab Emirates?

Businesses with annual turnover exceeding Varies AED must register for VAT. Voluntary registration is available for businesses below this threshold.

Can I reclaim VAT in United Arab Emirates?

VAT-registered businesses can generally reclaim input VAT on business purchases. Non-EU tourists may claim VAT refunds on qualifying purchases when leaving the country.