VAT Calculator
Calculate Value Added Tax - add VAT to net prices, extract VAT from gross amounts, or handle multiple VAT rates
Add VAT to Net Amount
Calculation Result
Net Amount
$1,000.00
VAT Amount (20%)
+ $200.00
Gross Amount (Inc. VAT)
$1,200.00
VAT/GST Rates by Country
What is VAT?
Value Added Tax (VAT) is a consumption tax placed on products and services at each stage of production or distribution where value is added. It's widely used in over 160 countries as a major source of government revenue.
Unlike sales tax which is only charged at the final sale, VAT is collected at every stage of the supply chain. Businesses can reclaim the VAT they pay on purchases (input VAT) against the VAT they charge on sales (output VAT), only remitting the difference to the government.
VAT Calculation Formulas
Add VAT to Net Price
VAT Amount = Net Price × (VAT Rate ÷ 100)
Gross Price = Net Price + VAT Amount
Extract VAT from Gross Price
Net Price = Gross Price ÷ (1 + VAT Rate ÷ 100)
VAT Amount = Gross Price - Net Price
Types of VAT Rates
Standard Rate
The main VAT rate applied to most goods and services. Typically ranges from 15% to 27% depending on the country.
Reduced Rate
Lower rates for essential items like food, medicine, children's clothing, books, and public transport. Often 5-10%.
Zero Rate
0% VAT on certain goods/services (exports, some food). Businesses can still reclaim input VAT on these transactions.
VAT vs Sales Tax
| Aspect | VAT | Sales Tax |
|---|---|---|
| Collection Point | Every stage of production/distribution | Only at final sale to consumer |
| Tax Credit | Businesses reclaim input VAT | No credit system |
| Tax Cascading | Avoided through credit system | Can occur (tax on tax) |
| Administration | More complex, self-enforcing | Simpler but prone to evasion |
| Common In | EU, UK, most countries globally | United States (state level) |
VAT Registration Thresholds
Businesses must register for VAT when their taxable turnover exceeds certain thresholds:
United Kingdom
£90,000
As of April 2024
Germany
€22,000
Small business exemption
France
€91,900
For services (goods: €101,000)
Frequently Asked Questions
What's the difference between VAT and GST?
GST (Goods and Services Tax) is essentially the same as VAT - both are consumption taxes on value added. The term GST is used in countries like Australia, Canada, India, and New Zealand, while VAT is used in Europe and most other countries.
Can I reclaim VAT as a consumer?
Generally no - VAT is a consumer tax. However, tourists in many countries can claim VAT refunds on purchases taken out of the country (tax-free shopping). Some countries also offer VAT exemptions for diplomats and certain organizations.
How do I calculate VAT backwards from a total?
To find the VAT included in a gross price, divide by (1 + rate) to get the net amount, then subtract from the gross. For 20% VAT: Net = Gross ÷ 1.20, VAT = Gross - Net. Use our "Remove VAT" tab to calculate this automatically.
What items are VAT exempt?
Common exemptions include: education, healthcare, financial services, insurance, and certain charity activities. Zero-rated items (exports, some food) are different - they're taxable at 0%, allowing businesses to reclaim input VAT.
VAT for International Business
B2B Cross-Border (EU): Intra-EU B2B sales are generally zero-rated if the buyer provides a valid VAT number. The buyer then accounts for VAT through the reverse charge mechanism.
B2C Cross-Border (EU): Sales to consumers in other EU countries may be subject to destination country VAT once sales exceed certain thresholds. The One-Stop Shop (OSS) simplifies compliance for these transactions.
Exports Outside EU: Exports to non-EU countries are zero-rated. Businesses can reclaim input VAT on exports while not charging output VAT.
Imports: VAT is typically due at the point of import. Registered businesses can often reclaim this as input VAT. Many countries offer deferred accounting or postponed VAT accounting schemes.