VAT Calculator
Calculate VAT amounts, net prices, and gross prices quickly and accurately.
Calculate VAT
Results
Net Amount
$100.00
Price without VAT
VAT Amount
$20.00
Tax amount at 20%
Gross Amount
$120.00
Price including VAT
Understanding VAT
Value Added Tax (VAT) is a consumption tax placed on a product whenever value is added at each stage of the supply chain, from production to the point of sale. The amount of VAT that the user pays is on the cost of the product, less any of the costs of materials used in the product that have already been taxed.
How VAT Works
VAT is collected by businesses on behalf of the government at each stage of the production process:
- Adding VAT: When calculating the price including VAT, multiply the net price by (1 + VAT rate).
- Removing VAT: When extracting the net price from a gross amount, divide the gross price by (1 + VAT rate).
- VAT Amount: To calculate just the VAT amount, multiply the net price by the VAT rate, or subtract the net price from the gross price.
VAT Formulas
To add VAT to a net price:
Gross Price = Net Price × (1 + VAT Rate)
To remove VAT from a gross price:
Net Price = Gross Price ÷ (1 + VAT Rate)
To calculate VAT amount:
VAT Amount = Net Price × VAT Rate
or
VAT Amount = Gross Price - Net Price
VAT Rates Around the World
VAT rates vary significantly across different countries and regions. Here are some examples of standard VAT rates around the world:
| Country/Region | Standard VAT Rate | Notes |
|---|---|---|
| United Kingdom | 20% | Reduced rates: 5% and 0% for certain goods |
| European Union | 15-27% | Varies by member state |
| Australia | 10% | Known as Goods and Services Tax (GST) |
| Canada | 5% | Additional provincial sales taxes may apply |
| Japan | 10% | Reduced rate: 8% for food and beverages |
| Singapore | 7% | Known as Goods and Services Tax (GST) |
It's important to note that many countries have multiple VAT rates, with reduced rates for essential goods and services like food, medicine, books, and children's clothing.
Frequently Asked Questions
What is the difference between VAT and sales tax?
While both are consumption taxes, VAT is collected at each stage of the supply chain, whereas sales tax is typically only collected at the final point of sale. VAT is also usually included in the displayed price in many countries, while sales tax is often added at checkout in places like the United States.
Are all goods and services subject to VAT?
No, many countries exempt certain goods and services from VAT or apply reduced rates. Common exemptions include essential items like basic foodstuffs, children's clothing, books, and medical services. Some items may be "zero-rated," meaning they're technically subject to VAT but at a 0% rate.
How do businesses handle VAT?
Businesses registered for VAT collect the tax on their sales (output tax) and can reclaim VAT paid on their purchases (input tax). They then pay the difference to the tax authority. This system ensures that the final consumer bears the full VAT cost, while businesses effectively act as tax collectors.
Can I reclaim VAT as an individual?
In most cases, individuals cannot reclaim VAT on domestic purchases. However, tourists visiting countries with VAT systems can often claim refunds on goods purchased during their visit when they leave the country, subject to minimum spending requirements and other conditions.