How to Calculate VAT in the UAE, Saudi Arabia, Bahrain and Oman (With Examples)

A customer asks for a price "including VAT". Your supplier sends a total and you need to know how much of it is tax. Your accountant asks why your VAT return is off by a few fils. Almost every small business in the Gulf runs into these questions in its first months of VAT.

The good news: VAT maths is simple once you know two formulas and one rounding rule. This guide walks through both with real numbers for every GCC country that charges VAT.

💡 Tip: you can make one in under two minutes with our free invoice generator: no sign-up, no watermark, PDF in English or Arabic.

Just need the number? Use our free VAT calculator to add or remove 5%, 10% or 15% VAT instantly, rounded correctly for AED, SAR, BHD and OMR.

VAT rates in the GCC (2026)

Some supplies are zero-rated (0%, for example most exports) or exempt (for example some financial services and residential rent). The formulas below are for the standard rate. For the details per country, see our GCC VAT rates guide. Selling in Kuwait? There is nothing to calculate yet: Kuwait has no VAT.

1. Adding VAT to a price

Use this when your price is before VAT (the usual way to quote businesses).

VAT = price × rate
Total = price × (1 + rate)

• UAE, 5%: 1,000 AED × 0.05 = 50 AED VAT → total 1,050 AED.
• Saudi Arabia, 15%: 1,000 SAR × 0.15 = 150 SAR VAT → total 1,150 SAR.
• Bahrain, 10%: 250.500 BHD × 0.10 = 25.050 BHD VAT → total 275.550 BHD.
• Oman, 5%: 84.750 OMR × 0.05 = 4.2375 → rounded to 4.238 OMR VAT → total 88.988 OMR.

Notice the Bahraini dinar and Omani rial: they have three decimals (1,000 fils or baisa), so VAT is rounded to three places, not two. More on that in our guide to currency decimals on GCC invoices.

2. Removing VAT from a VAT-inclusive price

Use this when a price already includes VAT: a shelf price, a total on a receipt, or a customer saying "my budget is 1,150 including VAT".

Price before VAT = total ÷ (1 + rate)
VAT = total − price before VAT

• Saudi Arabia: 1,150 SAR ÷ 1.15 = 1,000 SAR before VAT, so VAT is 150 SAR.
• UAE: a 99 AED item. 99 ÷ 1.05 = 94.2857 → 94.29 AED before VAT, VAT = 99 − 94.29 = 4.71 AED.
• Bahrain: 33.000 BHD including VAT. 33 ÷ 1.10 = 30.000 BHD before VAT, VAT = 3.000 BHD.

The most common mistake

Many people take 15% of the total: 1,150 × 15% = 172.50 SAR. That is wrong, because 15% is calculated on the price before VAT, not on the total. You would overstate your VAT by 22.50 SAR on every 1,150 SAR sale.

A quick shortcut for the VAT hidden inside an inclusive price:

3. Rounding: per line, to the nearest fils or halala

In the UAE, the Federal Tax Authority's guidance is to round VAT mathematically to the nearest fils (two decimals): 0.005 and above rounds up, below rounds down. On a full tax invoice the VAT is shown and rounded for each line; on a simplified invoice it can be rounded on the total. Saudi Arabia works the same way to the nearest halala.

Why it matters: three items at 10.10 AED each.

• Per line: 10.10 × 5% = 0.505 → 0.51 each, so 3 × 0.51 = 1.53 AED VAT.
• On the total: 30.30 × 5% = 1.515 → 1.52 AED.

One fils is not much, but across thousands of lines it causes differences between your invoices, your accounting software and your VAT return. Pick one method and use it everywhere. Our tax invoice generator rounds every step the same way the PDF does, so the numbers always match.

4. Discounts come before VAT

VAT is charged on the price after discount, because that is what the customer actually pays for.

Example in Saudi Arabia: a 2,000 SAR order with a 10% discount.

1. Discount: 2,000 × 10% = 200 SAR → taxable amount 1,800 SAR.
2. VAT: 1,800 × 15% = 270 SAR.
3. Total: 2,070 SAR.

If you calculated VAT on 2,000 first (300 SAR) and then took off the discount, you would charge 30 SAR too much VAT.

5. Prices shown to customers include VAT

In the UAE, prices you advertise or display for taxable supplies must, as a general rule, include VAT (exports and a few other cases are exceptions), and the FTA can fine businesses that do not. In Saudi Arabia, consumer price tags are normally VAT-inclusive too, while invoices must still break the total into price, VAT and total. In practice:

• Shop, menu or website prices: show the VAT-inclusive price.
• Quotations to businesses: usually before VAT, but say so clearly ("prices exclude 5% VAT").
• Tax invoices: always show the amount before VAT, the VAT and the total separately. See the UAE tax invoice checklist.

Excel and Google Sheets formulas

With the price before VAT in cell A2:

For Bahrain use 0.10 and 1.10. For the Bahraini dinar and Omani rial, change the last 2 to 3, because they have three decimals.

Skip the maths: let the invoice do it

If you make invoices by hand or in Excel, it is easy to mix up the formulas above. In GCCInvoice you pick the VAT rate (5%, 10%, 15% or a custom rate), enter your prices, and every line, discount, VAT amount and total is calculated and rounded for you, with the right decimals for each currency. For Saudi invoices it adds the ZATCA QR code too. It is free and needs no sign-up: create a VAT tax invoice.

Frequently asked questions

How do I calculate 5% VAT?

Multiply the price before VAT by 0.05. For 200 AED that is 10 AED VAT, so the total is 210 AED. To find the total in one step, multiply by 1.05.

How do I remove 15% VAT from a total?

Divide the total by 1.15. For 575 SAR: 575 ÷ 1.15 = 500 SAR before VAT, and the VAT is 75 SAR. Do not take 15% of 575.

Is VAT calculated before or after a discount?

After. Deduct the discount first, then calculate VAT on the reduced amount.

Should VAT be rounded per line or on the total?

On a full UAE tax invoice, VAT is rounded to the nearest fils for each line. Whatever you choose, use the same method on every invoice so your records and VAT return match.

Do I charge VAT in Kuwait or Qatar?

No. Neither country has introduced VAT, so invoices there have no VAT line.

This guide is general information, not tax advice. Rates and rules can change; check the Federal Tax Authority (UAE), ZATCA (Saudi Arabia), the National Bureau for Revenue (Bahrain) or the Oman Tax Authority for your situation. Last checked: October 2026.