VAT Calculator - Add or Remove Value Added Tax

What Is This VAT / GST Calculator?

VAT and GST are consumption taxes collected on the value added at each stage of the supply chain. For buyers and sellers, the core question is always the same: given a price, what is the tax component — and what is the final inclusive or exclusive figure? This tool solves both directions instantly for UAE (5%), Saudi Arabia (15%), Pakistan GST (17%), UK (20%), Bahrain (10%), and any custom rate. If you also need to convert prices between currencies, try our Currency Converter.

Pakistan's standard GST rate is 17% on most goods and services. The UAE introduced VAT at 5% in January 2018. Saudi Arabia doubled its rate from 5% to 15% in July 2020. Knowing which direction to calculate — and the correct mathematical method — is essential for accurate invoicing and compliance.

How to Use This Calculator

1. Enter your price amount — either pre-tax (net) or tax-inclusive (gross).
2. Select Add VAT to calculate the final amount from a net price. Select Remove VAT to strip the tax from a gross price.
3. Choose your region preset or enter a custom rate.
4. Results appear instantly: Net, VAT, and Gross amounts.

The Correct VAT Formula

Worked Examples

• UAE business invoice (5%): Net service AED 20,000. VAT = AED 1,000. Total invoice = AED 21,000.
• Saudi retail purchase (15%): Item priced SAR 575 inclusive. Net = 575 ÷ 1.15 = SAR 500. VAT component = SAR 75.
• Pakistan goods (17% GST): Manufacturer cost PKR 50,000 + GST = PKR 58,500 gross.
• UK e-commerce (20%): Listed price £120 including VAT. Net = 120 ÷ 1.20 = £100. VAT = £20.

Common Mistakes

• Multiplying instead of dividing to remove VAT: This is the most frequent error. Always divide the gross price by (1 + rate) to reverse-calculate the net.
• Charging VAT without being registered: UAE businesses below AED 375,000 annual turnover are not required (or legally permitted) to charge VAT on invoices.
• Applying GST to exempt categories: In Pakistan, certain essential goods, medicines, and educational services may be GST-exempt or zero-rated. Verify the applicable rate with FBR for your specific category.

VAT-Inclusive vs VAT-Exclusive: Where Most People Get Confused

This is the most common source of VAT calculation errors — and it costs businesses real money. The distinction is simple but critical:

• VAT-Exclusive price (net price): The price before VAT is added. A product priced at AED 100 (ex-VAT) at 5% VAT becomes AED 105 at checkout.
• VAT-Inclusive price (gross price): VAT is already inside the quoted price. If a restaurant bill says AED 105 and VAT is 5%, the VAT portion is NOT AED 5.25 — it is AED 5.00. The formula is: VAT = Gross Price × (Rate ÷ (100 + Rate)).

The mistake: Applying the VAT rate directly to an inclusive price. If a retailer charges AED 105 inclusive and calculates VAT as 5% × 105 = AED 5.25, they are overstating their VAT remittance. The correct answer is AED 5.00. Our calculator handles both cases — select "Remove VAT" for inclusive prices.

VAT Rates by Country — Quick Reference

VAT (called GST or Sales Tax in some regions) rates differ significantly across the countries this tool covers:

• UAE: 5% standard rate (introduced Jan 2018 under Federal Law No. 8/2017). Certain sectors zero-rated: healthcare, education, exports.
• Saudi Arabia: 15% (raised from 5% in July 2020 under ZATCA regulations). Basic food items, medications, and financial services are exempt.
• United Kingdom: 20% standard rate. Reduced rate of 5% on energy and certain social housing. Zero rate on food, children's clothing, books.
• Pakistan: 18% general sales tax (GST) under the Sales Tax Act 1990. Different rates apply at provincial level for services.
• Bahrain: 10% (raised from 5% in Jan 2022).
• Oman: 5% (introduced Apr 2021).
• Qatar, Kuwait: No VAT currently implemented (as of 2026).

How Businesses Actually Apply VAT — The Three Scenarios

Understanding how VAT flows in a supply chain avoids double-counting and incorrect pricing:

• B2B (Business to Business): A registered business charges VAT on its invoice. The buyer, also VAT-registered, reclaims that VAT as input tax. Net effect: VAT is cost-neutral between registered businesses.
• B2C (Business to Consumer): The end consumer cannot reclaim VAT. The full VAT amount is a cost. This is where inclusive vs exclusive pricing matters most.
• Mixed supplies: A product bundle may contain items at different VAT rates. Each must be apportioned separately — a common audit issue for retailers.

When VAT Is Not Charged — Exemptions and Zero-Rates

Zero-rated and exempt are not the same thing, and the difference matters for businesses:

• Zero-rated: VAT is charged at 0%. The business can still reclaim input VAT on costs. Examples: exports, international transport.
• Exempt: No VAT charged, and the business cannot reclaim input VAT on related costs. Examples: residential rent (UAE), financial services.

Common mistake: Treating exempt supplies the same as zero-rated and attempting to reclaim input VAT on costs — this leads to tax authority penalties during audits.

Real Pricing Scenario: Getting It Right

A Dubai consultant charges AED 10,000 for a project. To add UAE VAT correctly: AED 10,000 × 1.05 = AED 10,500 on the invoice. The AED 500 is collected and remitted to FTA quarterly. If the client is a VAT-registered business, they reclaim the AED 500. Net cost to client = AED 10,000. Net cost to end consumer = AED 10,500. Always state clearly on invoices whether your price is VAT-inclusive or exclusive.

Frequently Asked Questions