Home / Tax Calculators / VAT Calculator
VAT 🆓 Free Global Rates

VAT Calculator

Add VAT to a net price or reverse-calculate the net from a gross price - instantly, with a step-by-step formula. Supports UK 20%, all major EU rates, India GST, Australia 10%, Canada 5%, Singapore 9% and any custom rate. Includes a VAT chain explainer, zero-rated vs exempt guide and world VAT rate reference.

VAT Calculator

Quick-select country rate:

VAT Supply Chain Visualization

See how VAT is collected at every stage of production - only the value added is taxed each time.

VAT / GST Rates by Country

Click any country to use its standard rate in the calculator.

CountryStandard RateReduced Rate(s)Name

Data updated 2024–2025. Rates may vary; always verify with the relevant tax authority.

VAT Formulas

Add VAT (Exclusive Inclusive)

VAT Amount = Net Price × (VAT Rate / 100)
Gross Price = Net Price + VAT Amount
Gross Price = Net Price × (1 + VAT Rate / 100)

Example: Net £100, VAT 20%
VAT = £100 × 0.20 = £20
Gross = £100 + £20 = £120

Remove VAT (Inclusive Exclusive)

When the price already includes VAT, extract the net price and tax amount.

Net Price = Gross Price / (1 + VAT Rate / 100)
VAT Amount = Gross Price − Net Price

Example: Gross £120, VAT 20%
Net = £120 / 1.20 = £100
VAT = £120 − £100 = £20

Wrong way: £120 × 20% = £24 (incorrect!)
Right way: £120 / 1.20 − £120 = £20

Find VAT Rate

VAT Rate = ((Gross / Net) − 1) × 100
VAT Rate = (VAT Amount / Net Price) × 100

Example: Net £100, Gross £125
Rate = ((125/100) − 1) × 100 = 25%

VAT vs Sales Tax - Key Difference

Sales Tax: collected ONLY at final retail sale
Consumer pays tax once at point of purchase
Used in USA

VAT: collected at EVERY stage of supply chain
Each business charges VAT on its sales
Each business reclaims VAT paid on purchases
Net effect: same total amount paid as sales tax
Used in UK, EU, India (GST), Australia (GST),
Canada (GST/HST), 160+ countries worldwide

Input Tax Credit (ITC)

Each VAT-registered business can claim back
the VAT it paid on its purchases (inputs).

VAT Payable = Output VAT − Input VAT

Example:
Manufacturer sells for £200 + £40 VAT (20%)
Manufacturer bought materials for £100 + £20 VAT
VAT payable to govt = £40 − £20 = £20

This ensures only VALUE ADDED at each stage is taxed.

Frequently Asked Questions

VAT (Value Added Tax) is a consumption tax collected at every stage of the supply chain - from raw materials to the final consumer. Unlike US sales tax (charged only at the point of final retail sale), VAT is collected by every business in the chain, but each business reclaims the VAT paid on its own purchases (Input Tax Credit). The consumer ultimately bears the full cost. This multi-stage collection system creates a paper trail at every transaction, making VAT much harder to evade than single-stage sales tax. Over 170 countries use VAT or an equivalent (called GST in India, Australia, Canada, Singapore and others).
To add VAT: Gross (inc-VAT) = Net (ex-VAT) × (1 + VAT rate). For UK 20% VAT: £100 × 1.20 = £120 gross. VAT amount = £120 − £100 = £20. For India 18% GST: ₹500 × 1.18 = ₹590 gross. VAT/GST amount = ₹90. For Australia 10% GST: $200 × 1.10 = $220. The formula works identically for any VAT rate - just substitute the decimal rate.
To remove VAT: Net (ex-VAT) = Gross (inc-VAT) ÷ (1 + VAT rate). For 20% UK VAT: £120 ÷ 1.20 = £100 net. VAT amount = £120 − £100 = £20. Critical mistake to avoid: do NOT multiply the gross by the rate (£120 × 20% = £24 - wrong). The correct VAT on a £120 inc-VAT price at 20% is £20, not £24. The reverse formula (dividing by 1.20) is the only correct approach.
Sales tax is collected once - at the point of final retail sale to the consumer. The retailer collects it and pays it to the government. VAT is collected at every stage - raw materials, manufacturing, wholesale, retail - but each business in the chain reclaims VAT paid on inputs. The end result to the consumer is mathematically the same (20% on a £100 item = £20 either way), but VAT creates much better compliance because every transaction is documented and cross-checkable between buyer and seller records. Sales tax is used primarily in the United States and some other countries. The US has no federal VAT.
Most countries apply multiple VAT rates to different goods and services. In the UK: standard 20% on most goods and services; reduced 5% on domestic fuel and power, children's car seats, and some energy-saving materials; zero 0% on most food, children's clothing, books, newspapers, and public transport. In India, GST has four slabs: 5% (essentials), 12% (standard goods), 18% (most services and electronics), 28% (luxury and sin goods). Australia applies 10% GST to most goods but exempts fresh food, healthcare, and education entirely.
Zero-rated (0% VAT): The supply is technically subject to VAT but at 0%. The business can still reclaim Input VAT (VAT paid on its own purchases). Most food and books in the UK are zero-rated - the supermarket or publisher pays no output VAT but can reclaim all VAT paid on their business costs. VAT-exempt: The supply is completely outside the VAT system. The business making exempt supplies cannot reclaim Input VAT on related costs - it becomes a real expense. Financial services, insurance, education, and healthcare are typically exempt. This distinction matters enormously for businesses managing their Input Tax Credit position.
UK: Mandatory when taxable turnover exceeds £90,000 in any rolling 12-month period (2024/25 threshold). EU: Thresholds vary by country (typically €50,000–€85,000). India GST: Mandatory above ₹20 lakh turnover (₹10 lakh for special category states). Australia GST: Mandatory above A$75,000. Once registered, a business must charge VAT/GST on sales and file periodic VAT returns. Voluntary registration below the threshold is allowed in most countries and can be beneficial if a business has significant VAT on its own purchases that it wants to reclaim.
VAT-registered businesses file periodic VAT returns - usually quarterly - reporting: Output VAT (VAT charged on sales to customers) and Input VAT (VAT paid on business purchases). If Output VAT exceeds Input VAT, the business pays the difference to the government. If Input VAT exceeds Output VAT (common for exporters and zero-rated suppliers), the business receives a refund. In the UK, Making Tax Digital (MTD) requires VAT returns to be submitted digitally using compatible software. Late filing and payment attract penalties and interest charges.

Common VAT Rates

Related Calculators

Sales Tax (US) 🇮🇳 GST Calculator 🇺🇸 US Federal Tax

Share

VAT Calculator - Add VAT, Remove VAT and Understand How the Tax Works

VAT (Value Added Tax) is one of the most common taxes in the world - collected in over 170 countries under various names - and one of the most commonly miscalculated. The reverse calculation (removing VAT from a gross price) catches people out regularly, because multiplying the gross amount by the VAT rate gives the wrong number. This calculator handles both directions correctly and shows you the formula so you understand why the numbers are what they are.

The two calculations explained: Adding VAT: Net × (1 + rate) = Gross. Example: £100 × 1.20 = £120 inc-VAT · Removing VAT: Gross ÷ (1 + rate) = Net. Example: £120 ÷ 1.20 = £100 ex-VAT · Common mistake: £120 × 20% = £24 (wrong - the correct VAT is £20, not £24)

VAT Rates Around the World - Key Countries

🇬🇧 UK / 🇪🇺 Europe

  • UK: Standard 20% · Reduced 5% (domestic fuel, children's car seats) · Zero 0% (food, books, children's clothing)
  • Germany: Standard 19% · Reduced 7% (food, books, cultural items)
  • France: Standard 20% · Reduced 10% (restaurants, transport) · Super-reduced 5.5% (food, books)
  • Ireland: Standard 23% · Reduced 13.5% (tourism, construction) · Zero 0% (food, oral medicines)
  • Sweden / Denmark: 25% - among the highest in the EU
  • Hungary: 27% - highest standard VAT rate in the world
  • EU minimum: 15% standard rate required for all member states

Asia-Pacific / Americas

  • India GST: 4 slabs - 5% (essential goods), 12% (standard goods), 18% (most services, electronics), 28% (luxury, tobacco, vehicles)
  • Australia GST: 10% standard · Exempt: fresh food, healthcare, education
  • Canada GST: 5% federal · HST (Harmonised Sales Tax) in some provinces adds up to 15% combined
  • Singapore GST: 9% (raised from 8% in 2024)
  • Japan: 10% standard · 8% reduced rate on food and non-alcoholic drinks
  • New Zealand GST: 15% - one rate applies to almost everything
  • USA: No federal VAT or GST - state sales tax only (0–10.25%)

How VAT Works at Each Stage of the Supply Chain

Unlike US sales tax (charged once at point of final retail sale), VAT is collected at every stage of production and distribution. The key mechanism is the Input Tax Credit - each business in the chain pays VAT on its purchases but reclaims it from the government. Only the end consumer bears the full cost without reclaiming. Here is how it flows for a product with 20% VAT:

  1. Raw material supplier sells raw materials to manufacturer for £50 + £10 VAT (£60 total). They pay £10 VAT to the government.
  2. Manufacturer pays £60 (including £10 VAT). They add value and sell to wholesaler for £100 + £20 VAT (£120 total). They pay £20 VAT to government, reclaim £10 paid on their purchase. Net VAT paid by manufacturer: £10.
  3. Wholesaler pays £120 (including £20 VAT). Sells to retailer for £150 + £30 VAT (£180 total). Reclaims £20, pays £30. Net VAT: £10.
  4. Retailer pays £180 (including £30 VAT). Sells to consumer for £200 + £40 VAT (£240 total). Reclaims £30, pays £40. Net VAT: £10.
  5. Consumer pays £240 total. Gets no VAT reclaim. Bears the full £40 VAT.

Total VAT collected by government: £10 + £10 + £10 + £10 = £40 - exactly 20% of the final consumer price of £200. Every stage contributed equally. This is why VAT is called a multi-stage consumption tax.

Zero-Rated vs Exempt - A Critical Distinction

This is one of the most misunderstood aspects of VAT, and it matters significantly for businesses:

  • Zero-rated (0% VAT): The supply is subject to VAT - but at a 0% rate. The business making zero-rated supplies can still reclaim Input VAT (VAT paid on their own purchases) from the government. In the UK: most food, children's clothing, books and newspapers, passenger transport, and exported goods are zero-rated.
  • VAT-exempt: The supply is completely outside the VAT system. The business making exempt supplies cannot reclaim Input VAT on costs attributable to those exempt supplies. This can create a real cost for businesses that mix exempt and taxable supplies. In the UK: financial services, insurance, education, healthcare, and residential property sales are typically exempt.
  • Why it matters for businesses: A business that sells mostly exempt supplies (like a hospital or a school) cannot reclaim the VAT it pays on its own purchases - those become real costs. A business selling zero-rated goods (like a food manufacturer) can reclaim all its Input VAT, meaning it effectively receives regular VAT refunds from the government.

India GST - The Four-Slab Structure Explained

India replaced its complex system of multiple overlapping indirect taxes (central excise duty, state VAT, service tax, octroi, and others) in July 2017 with a unified Goods and Services Tax (GST). The GST Council sets rates across four main slabs:

  • 5% GST: Essential goods and services - most food items (packaged), transport, basic clothing below ₹1,000, affordable medicines, printed books
  • 12% GST: Standard goods - butter, ghee, cheese, frozen meat, fruit juices, business-class air travel, state-run lotteries
  • 18% GST: Most goods and services - electronics, computers, telecom services, financial services, IT services, most manufacturing, restaurants (non-AC), capital goods
  • 28% GST: Luxury and sin goods - automobiles, motorcycles above 350cc, cement, air conditioners, large screen TVs, tobacco, aerated drinks, gambling
  • 0% (exempt): Unprocessed fresh food, healthcare, education, and several agricultural products

India's GST is a dual structure - CGST (Central GST) and SGST (State GST) for intra-state transactions, and IGST (Integrated GST) for inter-state transactions. The rates shown above are the combined (CGST + SGST) rates for most transactions.

VAT Registration - When Do Businesses Need to Register?

  • UK: Mandatory registration when taxable turnover exceeds £90,000 in any rolling 12-month period (2024/25). Voluntary registration allowed below the threshold - useful for businesses that want to reclaim Input VAT on their purchases.
  • EU: Thresholds vary by country. Under the EU OSS (One Stop Shop) scheme, digital service providers must register for VAT in any EU country where they have customers, regardless of where the business is based.
  • India GST: Mandatory registration when turnover exceeds ₹20 lakh (₹10 lakh for special category states). Composition scheme available for small businesses with turnover below ₹1.5 crore.
  • Australia GST: Mandatory registration when annual turnover reaches A$75,000 ($150,000 for non-profit organisations).

How this calculator works, and where the numbers come from

The VAT Calculator applies the standard formula for this calculation to the values you enter and updates the result as you type. The calculation itself happens in your browser, and the page explains the method so you can check any result by hand.

Please note: Tax rules change and depend on your personal situation. Results are estimates, not tax advice. Confirm current rates and rules with the official tax authority or a qualified tax professional.

Sources and further reading

Learn more

Read our guide: Percentage Traps: Markup vs Margin, Stacked Discounts and More

Last reviewed: by the CalcQube Editorial Team. See our editorial policy for how we build and check calculators, or report an error.