The VAT Rate in the UAE

Article 3 of Federal Decree-Law No. 8 of 2017 is one sentence: "Without prejudice to the provisions of Title Six of this Decree-Law, a standard rate of 5% Tax shall be imposed on any supply or Import pursuant to Article 2 of this Decree-Law on the value of the supply or Import specified in accordance with the provisions of this Decree-Law."

Two things are doing work in it. Title Six is the zero-rate and exemption chapter, so the 5% is the default that everything outside that chapter falls into. And Article 2 sets what the rate lands on: every taxable supply and deemed supply made by a taxable person, and the import of concerned goods except as the Executive Regulation specifies.

The more useful fact is what the consolidated law does not say. The VAT Law has been amended three times since it was issued, and the consolidation published on 28 November 2025 marks each amended article with a numbered footnote naming the decree that changed it. Article 3 carries no footnote. Neither does Article 69, the currency article further down this page. Read at source on 17 August 2026.

If you are looking for the wider picture rather than the rate — registration, invoices, returns, refunds and penalties — VAT in the UAE is the hub page for this section.

The single most expensive misunderstanding in UAE VAT is treating "exempt" as a rate of nil. It is not a rate. Article 1 of the Decree-Law defines a taxable supply as one made for consideration in the course of business and not including an exempt supply — exemption removes the supply from the taxing provision altogether, rather than taxing it at zero.

That distinction decides two things that cost real money.

Input tax. Article 54(1)(a) allows recovery of input tax on costs used to make taxable supplies. A 0% supply is a taxable supply, so the recovery survives in full. An exempt supplier has no route to it: the VAT on its costs is a permanent expense, not a timing difference.

Registration. Article 19 calculates both thresholds on the value of taxable goods and services. Zero-rated turnover is inside that figure — an exporter billing at 0% can be comfortably over the AED 375,000 mandatory threshold and must still register. Exempt turnover is not in the figure at all, so a landlord letting residential property has no registration duty arising from that rent, however large it is. Article 20 removes one thing and only one: supplies of the person's own capital assets.

A fourth category sits outside all of this. Where the place-of-supply rules in Articles 27 to 31 put a supply outside the State, no UAE rate applies to it because UAE VAT never reached it. That is not the zero rate either. The clause-by-clause treatment of the 0% list is on zero-rated supplies in the UAE.

For a domestic sale of ordinary goods by a registered business, the answer is 5% of the value of the supply, and the value is defined by Article 34(1) as the consideration less the tax. Article 38 then requires an advertised price to include the tax, which is why a UAE shelf price is normally a gross figure and the VAT has to be extracted from it rather than added to it. The arithmetic in both directions is worked through on the vat calculator uae.

The rate is federal. There is no emirate-level VAT rate, no Dubai rate and no Abu Dhabi rate — Federal Decree-Law No. 8 of 2017 applies across the State, and a supplier in Sharjah charges what a supplier in Dubai charges.

What trips people up is a set of mechanisms that change something other than the rate:

• The reverse charge in Article 48 leaves the supply at 5% and moves the obligation to account for it onto the recipient.
• The profit margin scheme in Article 43 keeps the 5% and changes the base it is applied to.
• Designated zones listed in Cabinet Decision No. 59 of 2017 are treated as outside the State for certain supplies of goods, which is a place-of-supply outcome, not a rate.
• Imports are charged on the customs value including insurance, freight, customs fees and any excise paid — 5% of the supplier's invoice alone understates the base.

None of those is a discount. Each of them still has to be reported, and the return deadline that follows is set out on uae vat return filing date.

We found no published instrument and no ministerial announcement changing the standard rate, checked on 17 August 2026. This page will not tell you what the rate might become.

The evidence for that, rather than the assertion: the current consolidation of the VAT Law incorporates three amending decree-laws, the most recent in force on 1 January 2026, and Article 3 carries no amendment footnote in any of them. The Ministry of Finance's own VAT page still opens by stating that VAT was introduced on 1 January 2018 at a standard rate of 5%.

The 1 January 2026 amendments were real, but they landed somewhere else entirely — on the reverse charge, on the denial of input tax where a supply forms part of a chain connected to tax evasion, on the carry-forward of excess recoverable tax, and on the repeal of the VAT Law's own limitation article. A search for the "2025 rate" or the "2026 rate" is asking whether something changed. Something did; the rate was not it.

If you want the movement that is genuinely happening in UAE tax rates, it is on the direct-tax side — see corporate tax uae rate. For the FTA's own published material on VAT, uae vat guide fta collects what the Authority publishes and what each document is good for.

The second thing people mean by "the UAE VAT rate" is the exchange rate, and it has its own article. Article 69 of the Decree-Law: where a supply is in a currency other than the UAE dirham, the amount stated on the tax invoice must be converted into dirhams at the exchange rate approved by the Central Bank of the State at the date of supply. Article 59(1)(k) of the Executive Regulation then requires the rate actually applied to appear on the invoice, next to the tax amount in AED.

So the rate is fixed by a date you do not choose — the date of supply — and not by the date you raised the invoice, the date you were paid, or the rate your bank gave you. The Federal Tax Authority set out how it reads this in Public Clarification VATP004, Use of Exchange Rates for VAT purposes, and the practical rules below are the Authority's, not ours.

This page publishes no exchange rate and no conversion table. Rates move daily; a table copied into a web page is wrong the day after it is written, and Article 69 wants a specific day's figure in any case. Take it from the Central Bank for the date of supply. The full list of particulars an invoice has to carry is on uae vat format.

"VAT on gold in the UAE removed" is one of the most-searched things on this topic and it is wrong. Nothing was removed. What changed is who accounts for the tax on a business-to-business sale of precious goods, and the instrument doing it is Cabinet Decision No. 127 of 2024, which replaced Cabinet Decision No. 25 of 2018 on gold and diamonds. Public Clarification VATP043 states the Decision's effective date as 26 February 2025 — the Decision itself comes into force sixty days after publication — and VATP043 replaces the earlier clarification VATP032.

The scope is wider than gold. The specified precious metals are gold, silver, palladium and platinum; the specified precious stones are diamonds, both natural and manufactured, plus pearls, rubies, sapphires and emeralds. Jewellery made of them is included where the value of the metal or stone exceeds the value of the other components.

The conditions are cumulative and they are all on the buyer's side of the table. The recipient must be registered for VAT; must intend to resell the goods or use them in producing or manufacturing precious goods; and must give the supplier a written declaration to both effects before the date of supply. The supplier must receive and keep that declaration, verify the recipient's registration through the Authority's TRN verification tool, and retain evidence of the check.

Miss any of it and the consequence is asymmetric. VATP043 is direct about it: where the declarations are not submitted the reverse charge does not apply, the supplier must charge VAT, and the recipient is not eligible to recover that input tax — even though a tax invoice was received. The relief the buyer was chasing turns into an unrecoverable 5%.

Four refusals, each of them deliberate.

No exchange rate, and no conversion table. Article 69 wants the Central Bank rate at the date of supply. Any figure printed here would be wrong within a day and would invite somebody to use it for the wrong date. The Central Bank's own exchange-rate page did not return readable content to us when checked on 17 August 2026, so nothing on this page describes what that page contains; every currency rule above comes from Article 69, Article 59(1)(k) and the Authority's clarification.

No forecast of a rate change. We could not find an instrument or an announcement changing the 5%, so the honest output is that there is none as at 17 August 2026 — not a hedge about what may come.

No named products as zero-rated. Neither for gold nor for anything else. Article 45 attaches relief to conditions, and a product name is not a condition.

No emirate-by-emirate rates. They do not exist. One federal rate applies across the State.

What this page cannot do is tell you which category your own supply falls into. That depends on facts we cannot see, and on conditions that sit in the Executive Regulation rather than in the headline article.