VAT Calculator
Add VAT to a net amount or remove VAT from a gross amount at any rate. Enter the amount and the VAT rate — the calculator fills in the rest, showing the VAT portion and the net or gross total.
What Is VAT?
VAT (Value Added Tax) is a consumption tax charged on most goods and services. It is collected at each stage of the supply chain — manufacturers, wholesalers, and retailers all charge VAT on their sales and reclaim the VAT they paid on purchases. The net effect is that the final consumer bears the full tax.
VAT is standard across the EU (typically 17–27%), the UK (20%), Saudi Arabia (15%), the UAE (5%), and many other countries. The US does not use VAT — it uses a sales tax instead.
VAT Formulas
Adding VAT (net → gross):
VAT = Net Amount × (Rate ÷ 100)
Gross = Net Amount + VAT
Removing VAT (gross → net):
Net Amount = Gross ÷ (1 + Rate ÷ 100)
VAT = Gross − Net Amount
Worked Example
A product has a net price of $1,000 with 20% VAT:
VAT = $1,000 × 0.20 = $200
Gross = $1,000 + $200 = $1,200
Reverse: a product has a gross price of $1,200 with 20% VAT:
Net = $1,200 ÷ 1.20 = $1,000
VAT = $1,200 − $1,000 = $200
Common VAT Rates by Country
- United Kingdom — 20% (standard), 5% (reduced), 0% (zero-rated)
- Germany — 19% (standard), 7% (reduced)
- France — 20% (standard), 10%, 5.5%, 2.1% (reduced)
- Spain — 21% (standard), 10%, 4% (reduced)
- Italy — 22% (standard), 10%, 5%, 4% (reduced)
- Saudi Arabia — 15%
- UAE — 5%
- Pakistan — uses sales tax (GST), not VAT, typically 17–18%
- USA — no VAT; state and local sales tax typically 0–10%
Frequently Asked Questions
What is the difference between VAT and sales tax?
VAT is collected at every stage of the supply chain, and each business reclaims the VAT it paid on purchases. Sales tax is collected only once — at the point of sale to the final consumer. The US uses sales tax; most of Europe, the Middle East, and many other countries use VAT.
How do I remove VAT from a price?
Divide the gross price by (1 + rate ÷ 100). For a 20% VAT rate, divide by 1.20. For a $1,200 gross price, $1,200 ÷ 1.20 = $1,000 net, and the VAT is $200.
Why can't I just subtract 20% from the gross price?
Because 20% of the net price is not the same as 20% of the gross price. If net is $1,000 and VAT is 20%, gross is $1,200. If you subtract 20% from $1,200 you get $960 — which is not the correct net amount ($1,000). The correct math is division, not subtraction.
Is VAT charged on the net or gross amount?
VAT is charged on the net amount (the price before VAT). The VAT is then added to the net to get the gross. When you see a gross price on a receipt, the merchant has already calculated the VAT from the net.
Who pays VAT?
The final consumer pays the full VAT. Businesses pay VAT on their purchases but reclaim it from the tax authority. The net cost of VAT to a VAT-registered business is zero — it is the consumer who bears the tax.
What is a VAT-registered business?
In most countries, businesses with revenue above a threshold (for example £90,000 in the UK) must register for VAT. Once registered, they must charge VAT on sales, reclaim VAT on purchases, and file VAT returns to the tax authority — usually quarterly.