🧾 VAT Calculator
Add VAT to a net price or remove VAT from a gross price in seconds. Supports any VAT rate — choose a quick-select rate or enter your own.
VAT Formulas
When removing VAT, dividing by (1 + rate/100) gives the exact pre-tax price — do not simply subtract the percentage from the total, as this gives a slightly different (incorrect) answer.
Example Calculation
A product has a net price of $100 with a 20% VAT rate.
When to Use Each Mode
Use when you have a net (ex-VAT) price and need to find the consumer-facing price. Common for B2B invoicing where prices are quoted net.
Use when you have a gross (VAT-inclusive) price and need to find the net amount or the tax portion. Common when processing receipts for business expense claims.
Frequently Asked Questions
Value Added Tax (VAT) is a consumption tax levied on goods and services at each stage of the supply chain. Unlike sales tax (applied only at the final sale), VAT is collected incrementally — each business pays VAT on its value-added portion and can reclaim VAT it paid on inputs.
VAT and GST (Goods and Services Tax) are essentially the same mechanism — both are multi-stage consumption taxes that allow businesses to reclaim input tax credits. The main difference is terminology: Europe uses VAT, while countries like Australia, India, Canada, and New Zealand use GST. India applies GST at 5%, 12%, 18%, and 28% depending on the product.
VAT is collected at each stage of production and distribution. A manufacturer charges VAT on sales, then claims back VAT paid on raw materials. The retailer charges VAT on the final sale and claims back VAT paid to the manufacturer. The end consumer bears the full VAT cost without any reclaim — making VAT effectively a tax on final consumption.
Yes — VAT-registered businesses can reclaim the VAT they pay on business-related purchases (input tax). This is what distinguishes VAT from a simple sales tax. You reclaim input tax on your VAT return, paying only the net difference between VAT charged on sales and VAT paid on purchases.
Because percentages are base-dependent. If a $120 price includes 20% VAT, the VAT is $20 — which is 16.67% of $120, not 20%. Subtracting 20% from $120 gives $96, which is wrong. The correct formula is: Net = Gross ÷ (1 + rate/100) = 120 ÷ 1.20 = $100.
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