VAT Calculator
Calculate VAT amount and total price including VAT.
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Table of Contents
VAT Calculation Formula
Value Added Tax (VAT) is a consumption tax placed on goods and services at each stage of the supply chain where value is added. The final consumer bears the cost of the VAT.
Where:
- Amount = Price before VAT
- VAT Rate = VAT rate as a percentage
How to Calculate VAT
To calculate VAT, follow these steps:
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1Determine the amount before VAT
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2Identify the applicable VAT rate
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3Calculate the VAT amount by multiplying the amount by the VAT rate
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4Add the VAT amount to the original amount to get the total with VAT
Understanding VAT Rates
VAT rates can vary by country and type of goods or services. Here are some common VAT rates:
Standard Rate
The standard rate is the most common VAT rate applied to most goods and services
Reduced Rate
A lower rate applied to certain goods and services like food, books, and public transport
Zero Rate
Some goods and services are charged at 0% VAT but are still VAT-taxable
Exempt
Some goods and services are exempt from VAT entirely
VAT Calculation - Practical Examples
Example 1 Standard Rate VAT
A product costing $100 with a 20% VAT rate.
VAT Amount = $100 × (20/100) = $20
Total with VAT = $100 + $20 = $120
Example 2 Reduced Rate VAT
A book costing $50 with a 5% VAT rate.
VAT Amount = $50 × (5/100) = $2.50
Total with VAT = $50 + $2.50 = $52.50
Example 3 High-Value Item
A laptop costing $1,000 with a 20% VAT rate.
VAT Amount = $1,000 × (20/100) = $200
Total with VAT = $1,000 + $200 = $1,200