VAT Price & Margin Calculator
Add or strip 5% VAT, set your display price, and see the real profit margin behind it — built for UAE pricing.
Margin is calculated on net revenue, because collected VAT is remitted to the Federal Tax Authority and isn't profit. The rate defaults to the UAE standard 5% but is editable (set 0% for zero-rated supplies). This is a pricing aid, not tax or accounting advice — confirm your VAT treatment with a tax professional or the FTA.
How the maths works
To add VAT, the net price is multiplied by (1 + rate). At 5%, a net of AED 100 becomes a gross display price of AED 105, of which AED 5 is VAT.
To remove VAT from a gross price, the gross is divided by (1 + rate) to recover the net. At 5%, a display price of AED 105 has a net of AED 100 and AED 5 of VAT. Your profit margin is then the net minus your cost, expressed as a percentage of the net — so the VAT you're only holding on behalf of the FTA never inflates the margin figure.
Frequently Asked Questions
How do I remove VAT from a VAT-inclusive price?
To find the net (VAT-exclusive) amount from a price that already includes 5% VAT, divide the gross price by 1.05. The VAT portion is the gross price minus that net amount. For example, a shelf price of AED 105 has a net of AED 100 and AED 5 of VAT. This tool does both directions automatically.
How do I add VAT to a net price?
Multiply the net (VAT-exclusive) price by 1.05 to get the gross price a customer pays. On a net of AED 200, the VAT is AED 10 and the gross is AED 210. Marketers often need the gross figure because that's the price shown in ads and on the shelf.
Is my profit margin based on the net price or the gross price?
Profit margin is calculated on the net (VAT-exclusive) revenue, because the VAT you collect isn't yours to keep — it's passed to the Federal Tax Authority. This tool takes the VAT out of the display price first, then compares that net revenue against your cost, so the margin you see is the real margin, not an inflated one.
What is the standard VAT rate in the UAE?
The standard VAT rate in the UAE is 5%, in force since 1 January 2018. Some supplies are zero-rated (0%) — such as certain exports, international transport, and specific healthcare and education services — and some are exempt. The rate field here defaults to 5% but you can change it, so the tool also covers 0% zero-rated pricing.
Does a higher display price always mean a higher margin?
Not proportionally — because part of every price increase is VAT that goes to the FTA, not to you. Raising a VAT-inclusive price by AED 10 only adds about AED 9.52 to your net revenue at 5% VAT. This calculator shows the true net gain so you can price deliberately rather than by guesswork.