🧾 VAT Calculator
Add VAT to a net price or pull it back out of a gross total. Removing VAT is a division, not a subtraction, which is the error that costs small businesses the most money at bookkeeping time.
Adding VAT, removing VAT, and the division everyone gets wrong
VAT is charged at every stage of production, with each business reclaiming the VAT it paid on inputs and remitting the difference. Consumers pay the whole thing in the end, but the collection is spread along the chain, which is why prices are normally quoted inclusive.
gross = net × (1 + rate) net = gross / (1 + rate) VAT = gross − net
Removing VAT is a division
A receipt for €1,210 including 21% VAT does not contain €254.10 of VAT. The €1,210 is 121% of the net, so the net is 1,210 / 1.21 = €1,000 and the VAT is €210. Subtracting the percentage overstates it by €44.10, which is 21% too much.
| Rate | Divide by | Net | VAT |
|---|---|---|---|
| 17% | 1.17 | €854.70 | €145.30 |
| 19% | 1.19 | €840.34 | €159.66 |
| 20% | 1.20 | €833.33 | €166.67 |
| 21% | 1.21 | €826.45 | €173.55 |
| 23% | 1.23 | €813.01 | €186.99 |
| 27% | 1.27 | €787.40 | €212.60 |
The error compounds in bookkeeping. Getting the VAT fraction wrong on every purchase invoice for a quarter produces a return that does not reconcile, and finding it afterwards takes far longer than getting it right the first time.
Standard rates across Europe
| Country | Standard rate | Country | Standard rate |
|---|---|---|---|
| Luxembourg | 17% | Netherlands | 21% |
| Germany | 19% | Italy | 22% |
| Romania | 19% | Ireland | 23% |
| France | 20% | Poland | 23% |
| United Kingdom | 20% | Portugal | 23% |
| Spain | 21% | Finland | 24% |
| Belgium | 21% | Denmark and Sweden | 25% |
| Hungary | 27% |
Most countries also operate reduced rates, commonly 5% to 10%, on food, books, medicines, public transport and sometimes energy, and a zero rate on a narrow list. Spain's IVA has a reduced 10% and a super-reduced 4%; the UK zero-rates most food and children's clothing. Applying the standard rate to a whole basket will be wrong wherever reduced rates apply.
VAT against US sales tax
Sales tax is charged once, at the final retail sale, and is normally added at the till so the shelf price is not what you pay. VAT is charged throughout the chain and quoted inclusive. For a shopper the practical difference is that a European price tag is the price; an American one is not. The sales tax calculator handles the US side.
Reclaiming VAT
A VAT-registered business charges output VAT on sales and reclaims input VAT on purchases, remitting the difference. If a business buys €2,168 net of goods (paying €455 VAT at 21%) and sells them for €3,600 net (charging €756), it remits €301. Its actual margin is calculated on the net figures, €1,432, because the VAT was never its money.
This is also why registration thresholds matter: below them, a business cannot reclaim input VAT, so the VAT on its purchases becomes a real cost rather than a pass-through.
A worked example
A Spanish freelancer invoices €3,000 plus 21% IVA, so €3,630 gross, of which €630 is IVA to be remitted. In the same quarter they bought €847 gross of equipment, containing €147 of reclaimable IVA. The quarterly payment is €630 − €147 = €483, and the business keeps €3,000 − €700 = €2,300 of real revenue from these transactions.
Two neighbours worth knowing: the sales tax calculator, for the question this one leads into, and the discount calculator, which answers it from the other direction.
Frequently Asked Questions (FAQs)
How do I remove VAT from a price?
Divide by one plus the rate as a decimal: for 21%, divide the gross by 1.21. Never subtract 21% from the gross, which overstates the VAT by the rate squared and gets worse as the rate rises.
What is the VAT fraction?
A shortcut for extracting VAT from a gross amount in one step. At 20% it is 1/6, at 21% it is 21/121, at 23% it is 23/123. Multiplying the gross by the fraction gives the VAT directly without calculating the net first.
Is VAT the same as sales tax?
No. VAT is charged at every stage with businesses reclaiming their inputs, and prices are usually quoted inclusive. US sales tax is charged once at the final sale and added at the till. The consumer pays a similar amount; the collection mechanism and the price display differ.
Do I have to register for VAT?
Only above the registration threshold in your country, which varies widely. Voluntary registration can be worth it if your customers are businesses that reclaim it and you have significant input VAT, and a bad idea if you sell to consumers, since it raises your prices by the rate.
What are reduced and zero rates?
Lower rates applied to specific categories, typically food, books, medicines, public transport and children's items. Zero-rated goods carry 0% VAT but the seller can still reclaim input VAT, which is different from exempt goods, where they cannot.
Can tourists reclaim VAT?
In many countries, yes, on goods taken out of the region, subject to a minimum spend and a documented export. The refund is usually less than the full VAT because the handling companies take a margin. Services and anything consumed locally are not reclaimable.