# Input VAT apportionment calculator (partial exemption)

> If you make both taxable and exempt supplies, you recover VAT on costs used only for taxable supplies in full, nothing on costs used only for exempt supplies, and a percentage of VAT on shared overheads. Under the standard method, that percentage is taxable supplies divided by total supplies.

Interactive calculator: https://www.countify.ae/tools/input-vat-apportionment · Updated 2026-10-14 · Countify UAE

## Recovery on AED 10,000 of overhead VAT

Shared overheads only; no directly attributable costs.

| Taxable : exempt | Recovery percentage | Total recoverable input VAT | Irrecoverable input VAT |
| --- | --- | --- | --- |
| 90 : 10 | 90% | AED 9,000.00 | AED 1,000.00 |
| 75 : 25 | 75% | AED 7,500.00 | AED 2,500.00 |
| 50 : 50 | 50% | AED 5,000.00 | AED 5,000.00 |
| 20 : 80 | 20% | AED 2,000.00 | AED 8,000.00 |

Property companies with residential rent (exempt) are the most common case.

## Who needs to apportion

Partial exemption affects businesses that make exempt supplies alongside taxable ones: landlords with residential and commercial tenants, financial services firms charging margin-based fees, and holding companies receiving exempt income. Each VAT return uses the period's figures, then an annual adjustment trues up the percentage for the whole tax year.

- Directly attributable to taxable supplies: 100% recoverable
- Directly attributable to exempt supplies: 0% recoverable
- Shared overheads: recoverable at taxable ÷ (taxable + exempt)

## Special methods

If the standard method gives a distorted result, you can apply to the FTA to use a special method, for example one based on floor area for a mixed-use building. Approval is needed before you use it. Our [VAT team](https://www.countify.ae/services/vat-return) can model both methods.

## Legal basis

- VAT Executive Regulation, Article 55 (input tax apportionment) (https://tax.gov.ae/en/legislation.aspx)

## Frequently asked questions

### What is the standard apportionment method in the UAE?

Recoverable residual input VAT = residual input VAT × taxable supplies ÷ (taxable + exempt supplies), calculated each return and adjusted annually.

### Are zero-rated supplies treated as taxable?

Yes. Zero-rated supplies are taxable supplies at 0%, so they count as taxable in the percentage.

### When is the annual adjustment made?

In the first VAT return after the end of the tax year, using the whole year's figures.