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.
Reviewed by Countify's ACCA/FCCA chartered certified accountants · Updated
- Recovery percentage
- 80%
- Recoverable share of overhead VAT
- AED 8,000.00
- Irrecoverable input VAT
- AED 2,000.00
- Total recoverable input VAT
- AED 23,000.00
This is the standard method. VAT on costs used only for exempt supplies is not recoverable at all, and the percentage is trued up in an annual adjustment.
Results are estimates for general information, not tailored advice.
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 can model both methods.
Legal basis
We review this calculator whenever the FTA or Ministry of Finance issues a new decision or clarification.
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.
VAT registration and returns
Our FTA registered accountants register you, file every return on time and fix errors before the FTA finds them, for a fixed monthly fee.