VAT Calculator
VAT Calculation Result
How This VAT Calculator Works
Value Added Tax (VAT) is a consumption tax applied to goods and services in many countries. Unlike sales tax added at checkout, VAT is included in displayed prices in most countries.
- Add VAT: Calculate gross price from net amount
- Remove VAT: Find net price from gross amount
The visual tax breakdown shows exactly how VAT affects prices. The blue section represents the net price (what the business receives), the red section shows the VAT amount (tax collected), and the total bar represents the gross price.
The Core VAT Formulas
Gross Price = Net Price + VAT Amount
Net Price = Gross Price ÷ (1 + VAT Rate ÷ 100)
For a £100 item with 20% VAT: VAT = £100 × 0.20 = £20. Gross price = £100 + £20 = £120. When you see £120 on a price tag, £20 goes to the government as tax.
Common Questions About VAT
What’s the Difference Between VAT and Sales Tax?
Sales tax is added at point of sale (price tags show pre-tax price). VAT is included in displayed prices (price tags show final price).
How Do I Reclaim VAT as a Business?
Registered businesses can reclaim VAT paid on business expenses. The process involves:
- Charging VAT on sales (output tax)
- Paying VAT on purchases (input tax)
- Paying/reclaiming the difference quarterly
- Keeping all VAT invoices for 6+ years
What Items Have Reduced or Zero VAT?
Most countries have reduced rates for essentials. Common categories include:
- Reduced rates: Food, children’s items, books, energy
- Zero-rated: Most food, children’s clothing, books, newspapers
- Exempt: Postage, insurance, education, financial services
How Does VAT Work for International Purchases?
EU to Consumer: Charge your country’s rate under €10,000/year threshold.
Outside EU to EU: Import VAT due at customs (often collected by marketplace).
VAT Rates by Country (Standard Rates)
| Country | Standard Rate | Reduced Rate | Currency | Notes |
|---|---|---|---|---|
| United Kingdom | 20% | 5%, 0% | GBP (£) | Post-Brexit rules apply |
| Germany | 19% | 7% | EUR (€) | Temporarily 16% in 2020 |
| France | 20% | 10%, 5.5%, 2.1% | EUR (€) | Multiple reduced rates |
| Ireland | 23% | 13.5%, 9%, 4.8% | EUR (€) | Tourism sector 9% |
| Switzerland | 7.7% | 3.7%, 2.5% | CHF (Fr) | Not EU, but has VAT |
| Norway | 25% | 15%, 11.11% | NOK (kr) | Not EU, EEA member |
VAT Registration Thresholds
Registration becomes mandatory when your taxable turnover exceeds these thresholds:
- United Kingdom: £90,000/year (2024)
- Germany: €22,000/year
- France: €36,800/year
- Ireland: €40,000 services, €80,000 goods
Common VAT Calculation Examples
Business Pricing Example
You sell products for £50 net. With 20% VAT: £50 × 1.20 = £60 gross. Customer pays £60, you keep £50, send £10 to tax authority.
Expense Claims Example
You buy equipment for €120 including 20% VAT. Net price = €120 ÷ 1.20 = €100. VAT reclaimable = €20 (if business registered).
Common VAT Mistakes to Avoid
- Wrong rate application: Applying standard rate to reduced-rate items
- Missing registration deadlines: Register immediately when exceeding threshold
- Poor record keeping: Missing VAT invoices make reclaims impossible
- Incorrect invoice rounding: Use unrounded figures, then round final totals
Quick VAT Calculation Tips
For quick mental calculations:
20% VAT Calculations
- Add VAT: Add 1/5th of net price. £100 + £20 = £120
- Remove VAT: £120 ÷ 1.20 = £100
10% VAT Calculations
- Add VAT: Add 1/10th. £100 + £10 = £110
- Remove VAT: £110 ÷ 1.10 = £100
For Odd Percentages
17.5% (old UK rate) = 10% + 5% + 2.5%. Break into manageable chunks for mental math.
For precise calculations, especially for business accounting or large purchases, use the calculator above. It provides exact figures for any country’s VAT rate, shows clear visual breakdowns, and helps you avoid costly VAT calculation errors.