Add VAT to a price, take it out of a total, or find the rate that was charged. Fill in any two boxes and the other two are worked out.
Value-added tax, or VAT, is a consumption tax charged on the value added to goods and services at each stage of their production and sale. Businesses collect it on behalf of the government and pass the net amount on. Most countries outside the United States use VAT or a similar goods and services tax, often called GST. The price before the tax is the net price, and the price including the tax is the gross price.
The gross price equals the net price multiplied by one plus the VAT rate. The VAT amount is the gross price minus the net price. Any two of the four values, the rate, the net price, the gross price and the VAT amount, let you find the other two. To add VAT, enter the rate and the net price. To remove VAT from a total, enter the rate and the gross price. To discover the rate on a receipt, enter the net and gross prices.
Fill in two boxes and leave the others empty. If you fill in more than two, the calculator uses the first pair it can and works the rest out again, so clear a box to solve for it. The amounts are shown with two decimals, and the rate is shown to three decimals. VAT rates differ between countries and between types of goods, so always check the rate that applies to you.
Multiply the net price by one plus the VAT rate as a decimal. At 20% that means multiplying by 1.2, so a net price of 1,200 becomes a gross price of 1,440. Enter the rate and the net price to do this.
Divide the gross price by one plus the VAT rate as a decimal. At 20%, divide by 1.2, so 1,440 gives a net price of 1,200 and a VAT amount of 240. Enter the rate and the gross price to do this.
Enter the net price and the gross price, or the net price and the VAT amount. The calculator divides the VAT amount by the net price and shows the rate.
VAT is charged at each stage of production and is usually included in the displayed price. Sales tax in the United States is charged only on the final sale and added at the register. The arithmetic is the same.
The calculator uses the first pair it can, in the order rate and net price, rate and gross price, rate and VAT amount, net and gross, net and VAT, and then gross and VAT, and works out the rest again.
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