1. Adding VAT to a net price
VAT = net price × rate, and total = net price × (1 + rate).
| Country | Rate | Net 1,000 | VAT | Total |
|---|---|---|---|---|
| Saudi Arabia | 15% | 1,000 | 150 | 1,150 |
| UAE / Oman | 5% | 1,000 | 50 | 1,050 |
| Bahrain | 10% | 1,000 | 100 | 1,100 |
| Egypt | 14% | 1,000 | 140 | 1,140 |
2. Removing VAT from a price that includes it
Net = total ÷ (1 + rate), and VAT = total − net. A common mistake is to take 15% of the total, which overstates the VAT.
- Saudi Arabia: SAR 2,300 ÷ 1.15 = SAR 2,000 net, so VAT is SAR 300 (not 345).
- UAE: AED 525 ÷ 1.05 = AED 500 net, so VAT is AED 25.
- Egypt: EGP 11,400 ÷ 1.14 = EGP 10,000 net, so VAT is EGP 1,400.
Shortcut: the VAT inside a VAT-inclusive price is total × rate ÷ (1 + rate). That is 15/115 in Saudi Arabia, 5/105 in the UAE and 14/114 in Egypt.
3. Working out the VAT you owe
VAT payable = output VAT on sales − input VAT on purchases for the period.
| Quarter (UAE, 5%) | Net | VAT |
|---|---|---|
| Sales | AED 800,000 | 40,000 (output) |
| Purchases and expenses with valid tax invoices | AED 500,000 | 25,000 (input) |
| VAT payable to the FTA | AED 15,000 |
Rounding and discounts
- Calculate VAT per line or per invoice consistently, and round to two decimals (three for BHD and OMR).
- Discounts given on the invoice reduce the taxable amount before VAT is applied.
- Credit notes reduce output VAT in the period they are issued, and need to reference the original invoice.
Skip the maths: our free VAT calculator adds or removes VAT for every Gulf country and Egypt. New to VAT? Start with What is VAT and how does it work?
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