UAE reverse charge VAT calculator
When a VAT-registered UAE business buys services from abroad (software, advertising, consulting) the supplier charges no UAE VAT, so the buyer accounts for 5% itself: it declares the VAT as output tax and recovers it as input tax in the same return. For a fully taxable business the net cost is zero.
Reviewed by Countify's ACCA/FCCA chartered certified accountants · Updated
100% unless you make exempt supplies.
- Output VAT you declare
- AED 1,500.00
- Input VAT you recover
- AED 1,500.00
- Net cost to you
- AED 0.00
Results are estimates for general information, not tailored advice.
Reverse charge on a foreign software subscription
Invoice from an overseas supplier with no UAE VAT on it.
| Recovery rate | Output VAT you declare | Input VAT you recover | Net cost to you |
|---|---|---|---|
| 100% | AED 1,500.00 | AED 1,500.00 | AED 0.00 |
| 80% | AED 1,500.00 | AED 1,200.00 | AED 300.00 |
| 50% | AED 1,500.00 | AED 750.00 | AED 750.00 |
Fully taxable businesses pay nothing net, but must still report both sides on the return.
When the reverse charge applies
The reverse charge applies to:
- Services and goods imported from outside the UAE by a VAT-registered business
- Gold and diamonds, and certain electronic devices, sold between registered businesses in the UAE
- Crude oil, refined oil and natural gas sold between registered businesses
How to report it
Declare the VAT in box 3 (supplies subject to the reverse charge) and recover it in box 10. Forgetting the reverse charge on foreign subscriptions is one of the most common VAT return errors, and the FTA can penalise it even when the net effect is zero.
Legal basis
We review this calculator whenever the FTA or Ministry of Finance issues a new decision or clarification.
Frequently asked questions
Do I pay reverse charge VAT on Google Ads and software subscriptions?
Yes, if you are VAT registered and the supplier is outside the UAE. Declare and recover it on your return.
Is reverse charge VAT a real cost?
Only if you cannot recover all your input VAT, for example because you make exempt supplies.
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.