Example: Net price = £80, VAT rate = 20%
VAT amount = £80 × 20% = £16.00
Gross price = £80 + £16 = £96.00
Tool 12 of 22
VAT calculator.
Add VAT to a net price, or strip VAT from a gross price. Presets for UK, EU, Australia and more.
Common rates
VAT amount
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Total inc-VAT
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■ Net price ■ VAT
What is VAT?
VAT (Value Added Tax) is a consumption tax charged on goods and services at every stage of production and distribution. Unlike US sales tax — which is only applied at the point of final sale — VAT is collected incrementally, with each business in the supply chain paying VAT on their purchase and charging it on their sale.
The end consumer bears the full cost. VAT is used in over 160 countries. In Australia, Canada, Singapore, and India it is called GST (Goods and Services Tax) but works identically.
How to add VAT to a price
To find the gross (inc-VAT) price from a net (ex-VAT) price:
Gross Price = Net Price × (1 + VAT Rate ÷ 100)
How to remove VAT from a price
To find the net (ex-VAT) price from a gross (inc-VAT) price, divide by (1 + rate) — do not simply subtract the VAT percentage, as that gives the wrong answer.
Net Price = Gross Price ÷ (1 + VAT Rate ÷ 100)
Example: Gross price = £96, VAT rate = 20%
Net price = £96 ÷ 1.20 = £80.00
VAT paid = £96 − £80 = £16.00
VAT rates by country
| Country | Standard rate | Reduced rate(s) |
|---|---|---|
| 🇬🇧 United Kingdom | 20% | 5% · 0% |
| 🇩🇪 Germany | 19% | 7% |
| 🇫🇷 France | 20% | 10% · 5.5% · 2.1% |
| 🇮🇪 Ireland | 23% | 13.5% · 9% · 4.8% · 0% |
| 🇮🇹 Italy | 22% | 10% · 5% · 4% |
| 🇳🇱 Netherlands | 21% | 9% |
| 🇪🇸 Spain | 21% | 10% · 4% |
| 🇧🇪 Belgium | 21% | 12% · 6% |
| 🇸🇪 Sweden | 25% | 12% · 6% |
| 🇩🇰 Denmark | 25% | None |
| 🇦🇺 Australia (GST) | 10% | None |
| 🇮🇳 India (GST) | 18% | 28% · 12% · 5% |
| 🇨🇦 Canada (GST) | 5% | Varies by province |
| 🇸🇬 Singapore (GST) | 9% | None |
Rates shown are standard rates as of 2025. Always verify with local tax authority for the current rate applicable to your specific goods or services.
How to calculate VAT
Value Added Tax (VAT) is a consumption tax applied to goods and services at each stage of the supply chain. Unlike US sales tax, which is only collected at the final point of sale, VAT is charged incrementally — but the end consumer still bears the full cost. Over 160 countries use VAT or its equivalent (GST), making it one of the most widespread tax systems in the world.
The VAT formulas
Adding VAT: Gross = Net × (1 + VAT Rate ÷ 100)
Removing VAT: Net = Gross ÷ (1 + VAT Rate ÷ 100)
To add 20% VAT to a £100 net price: £100 × 1.20 = £120 gross. To extract the net price from a £120 VAT-inclusive total: £120 ÷ 1.20 = £100 net, £20 VAT.
Common VAT rates worldwide
- United Kingdom: 20% standard, 5% reduced (energy, car seats), 0% (food, children's clothing, books).
- Germany: 19% standard, 7% reduced (food, books, public transport).
- France: 20% standard, 5.5% reduced (food, books), 10% intermediate.
- Italy: 22% standard, 10% and 4% reduced rates.
- Sweden: 25% — one of the highest in the world.
- Australia (GST): 10% flat rate. Fresh food is GST-free.
- India (GST): 5%, 12%, 18%, or 28% depending on the item category.
- Canada (GST): 5% federal GST, plus provincial taxes in most provinces.
Inc VAT vs. ex VAT pricing
In the UK and EU, consumer-facing prices must legally be displayed inclusive of VAT — the number on the tag is what you pay. Business-to-business (B2B) invoices, however, typically quote prices exclusive of VAT, since registered businesses can reclaim the VAT they pay. This is why the same product might show different prices on a consumer website versus a wholesale catalogue.
Common mistake: subtracting the percentage directly
A frequent error when removing VAT is to simply subtract the percentage. If a £120 price includes 20% VAT, the VAT is not £120 × 20% = £24. The correct calculation: £120 ÷ 1.20 = £100 net, so the VAT is £20. The 20% applies to the net price, not the gross — subtracting 20% of the gross over-reports the tax and under-reports the base price.
VAT vs. US sales tax
VAT and US sales tax are both consumption taxes, but they differ in structure. VAT is collected at every stage of production (each business pays VAT on its inputs and charges VAT on its outputs, remitting the difference). US sales tax is collected only once, at the final point of sale to the consumer. For consumers, the practical effect is similar — you pay tax on what you buy — but VAT systems are generally considered harder to evade because of the multi-stage collection mechanism.
Frequently asked questions.
What is VAT?
VAT (Value Added Tax) is a consumption tax added to the price of goods and services at each stage of production or sale. The end consumer pays the full VAT; businesses collect it on behalf of the government. It is used in over 160 countries including all EU member states, the UK, Australia (as GST), and India (as GST).
How do I add VAT to a price?
VAT Amount = Net Price × (VAT Rate ÷ 100). Gross Price = Net Price × (1 + VAT Rate ÷ 100). Example: £80 + 20% VAT = £80 × 1.20 = £96. The VAT amount is £16.
How do I remove VAT from a price?
Net Price = Gross Price ÷ (1 + VAT Rate ÷ 100). Example: £96 inc VAT at 20% = £96 ÷ 1.20 = £80 net. VAT paid = £96 − £80 = £16. Do NOT simply multiply by the VAT rate — that gives the wrong answer.
What is the VAT rate in the UK?
The UK has three VAT rates: Standard rate 20% (most goods and services), Reduced rate 5% (e.g. home energy, children's car seats, sanitary products), and Zero rate 0% (e.g. food, children's clothing, books, public transport).
What is the standard VAT rate in the EU?
EU member states set their own rates within EU guidelines. Common standard rates: Germany 19%, France 20%, Ireland 23%, Italy 22%, Netherlands 21%, Spain 21%, Sweden 25%. All EU states must have a standard rate of at least 15%.
What does "inc VAT" and "ex VAT" mean?
"Inc VAT" (inclusive of VAT) means the price already includes the tax — what you actually pay. "Ex VAT" (exclusive of VAT) means the price before tax is added. Business-to-business prices are often quoted ex VAT; consumer prices must legally be shown inc VAT in the UK and EU.
Is VAT the same as GST?
They work the same way but have different names. Australia, India, Canada, New Zealand, and Singapore call it GST (Goods and Services Tax). The UK and EU call it VAT. Both are multi-stage consumption taxes collected at each point of sale.
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