Calculate the VAT on your amount quickly with the default 5% VAT rate in Yemen.
The **Value Added Tax (VAT)** is a consumption-based tax introduced by the Yemeni government on **January 1, 2019**. It is applied to most goods and services, excluding those that are specifically exempt or zero-rated. VAT is a **5% tax**, meaning that for every taxable product or service, an additional 5% is added to its price.
The introduction of VAT was part of Yemen’s broader strategy to increase non-oil revenue and improve the country's economic stability. The revenue generated from VAT is used to fund essential public services such as infrastructure, healthcare, education, and social programs, which benefit the country's citizens.
VAT is a **tax on consumption**, which means it’s paid by the end consumer. When businesses sell goods or services, they charge VAT on top of the sale price. However, businesses are able to **recover the VAT** they pay on their own purchases, making VAT a tax that is ultimately passed on to the final consumer.
For example: - If a retailer buys goods for **YER 1000**, they pay **YER 50** as VAT (5%). - When they sell those goods to a customer for **YER 2000**, they charge the customer **YER 100** as VAT. - The retailer will pay the government **YER 50** (the difference between the VAT charged to the customer and the VAT paid on the goods they bought).
Not every business in Yemen is required to register for VAT. The government has set thresholds based on annual revenue. Businesses with taxable supplies exceeding **YER 50 million** per year are required to register for VAT.
However, businesses with taxable supplies between **YER 20 million** and **YER 50 million** can opt for **voluntary registration**. This flexibility allows small businesses to register for VAT and recover the VAT they pay on their own expenses.
In addition, businesses that only provide VAT-exempt services or whose supplies are outside the scope of VAT are not required to register.
VAT offers numerous benefits to the Yemeni economy. The primary advantage is **economic diversification**. By introducing VAT, Yemen is able to generate non-oil revenue, which helps reduce its reliance on oil exports. This has allowed the country to strengthen its fiscal position and invest in long-term economic development.
Furthermore, VAT brings more **transparency** to the economy. With a clear tax system in place, businesses and consumers are more aware of the costs and taxes associated with products and services. This fosters a competitive environment and encourages businesses to maintain accurate financial records.
The Yemeni government has exempted certain goods and services from VAT, meaning that no VAT is charged on these transactions. Some key **VAT-exempt** sectors include: - **Healthcare**: Medical services and medications are exempt from VAT. - **Education**: School fees, university tuition, and training services are exempt. - **Financial Services**: Most financial transactions such as loan interest and savings accounts are exempt.
In addition, there are **zero-rated** goods and services, which means that VAT is applied at a 0% rate, allowing businesses to reclaim VAT on inputs. Some examples include: - **Exports**: Goods and services exported outside of Yemen are zero-rated. - **International Air Travel**: Flights departing from Yemen are zero-rated. - **Certain Food Products**: Basic food items such as fruits, vegetables, and grains are zero-rated.
The VAT calculation is simple and straightforward. The formula is as follows:
VAT = Amount * VAT Rate
To calculate the VAT on a given amount, multiply the price of the goods or services by the VAT rate (5% in Yemen).
**Example**:
If you are purchasing a product worth **YER 1000**, the VAT would be:
1000 * 5% = YER 50
So, the total cost for the product will be **YER 1050**.
To help with VAT calculations, many businesses and individuals use online **VAT calculators**. These tools automatically compute the VAT amount based on the entered price, making the process much easier.
A: You can use our **Yemen VAT Calculator** to quickly calculate VAT on any product or service in Yemen. Simply enter the amount and the default VAT rate of 5%, and the tool will show you the VAT amount and the total cost after VAT.
A: The current VAT rate in Yemen is **5%**, which was introduced on January 1, 2019, as part of the Yemeni government's strategy to generate non-oil revenue and improve the country's economic stability.
A: To calculate VAT, multiply the price of the product by the VAT rate (5%). For example, for a product priced at **YER 1000**, the VAT would be **1000 * 5% = YER 50**. The total price after VAT would be **YER 1050**.
A: Yes! The Yemen VAT calculator allows you to calculate VAT for multiple items by entering each item’s price and applying the VAT rate to each one separately, or adding them together for a cumulative VAT calculation.
A: The default VAT rate in Yemen is **5%**, but the calculator can be adjusted to different VAT rates if necessary (e.g., for future changes or special VAT rates in specific regions). You can manually change the VAT rate in the calculator to suit your needs.
A: VAT is a consumption tax applied to most goods and services in Yemen. It was introduced as part of the government's broader strategy to diversify its revenue base and reduce reliance on oil exports. The VAT revenue helps fund essential public services such as healthcare, education, and infrastructure.
A: VAT is applicable to most goods and services in Yemen, but certain items are exempt or zero-rated. For example, basic food items, healthcare, education, and certain financial services are either exempt or subject to a 0% VAT rate.
A: If you are a business in Yemen, you are required to charge VAT on the goods and services you sell. You can recover the VAT you paid on business purchases and expenses through input VAT credits. Be sure to file your VAT returns regularly with the **Yemeni Tax Authority**.
A: **eInvoicing** is a mandatory requirement for businesses in Yemen, introduced by the **Yemeni Tax Authority (YTA)**. It requires businesses to generate electronic invoices that comply with the YTA’s requirements, including the use of QR codes on invoices. This ensures transparency, reduces tax evasion, and simplifies the audit process.
