How VAT works
VAT (value-added tax) is a percentage added to the net price of goods and services in the UK and EU. The VAT amount is the net price multiplied by the rate divided by 100, and the gross price is net plus VAT. Standard rates vary by country: the UK uses 20%, Germany 19%, France 20%, Spain 21%, Italy 22%, and the Netherlands 21%, with reduced rates for some goods.
The reverse calculation extracts the net price from a VAT-inclusive gross amount: divide the gross by (1 + rate ÷ 100) to get the net, then subtract to find the VAT. This tool is built for UK and EU VAT; US sales tax works differently (charged once at the point of sale rather than value-added), so use the separate Sales Tax Calculator for US rates.
Looking for US state and local sales tax instead? This tool covers UK and EU VAT only.
How do I calculate VAT (add or remove it)?
To add VAT, multiply the net price by the VAT rate divided by 100, then add that to the net price for the gross total. To remove VAT from a gross price, divide the gross by (1 + rate ÷ 100) to recover the net. Example: a £100 net price at 20% UK VAT has VAT of £100 × 0.20 = £20, for a gross of £120.
Steps to calculate VAT both ways
- Convert the VAT rate to a decimal by dividing by 100 (20% becomes 0.20).
- To add VAT: multiply the net price by that decimal to get the VAT amount, then add it to the net price for the gross total (£100 + £20 = £120).
- To remove VAT from a VAT-inclusive gross price, divide the gross by (1 + rate ÷ 100) to recover the net price (£120 ÷ 1.20 = £100).
- Subtract the recovered net price from the gross to get the VAT amount hidden inside it (£120 − £100 = £20).
- Switch the rate to match the country: 20% UK, 19% Germany, 20% France, 21% Spain, 22% Italy, 21% Netherlands.
VAT formulas
VAT = Net × (Rate ÷ 100) · Gross = Net + VAT · Reverse: Net = Gross ÷ (1 + Rate ÷ 100)
- Net = the price before VAT is added, also called the excl.-VAT or ex-VAT price
- Rate = the VAT percentage, set by each country's standard or reduced rate
- Gross = the VAT-inclusive price a customer actually pays
Example VAT calculations by country rate
| Net price | Country / rate | VAT amount | Gross price |
|---|
| £100.00 | UK 20% | £20.00 | £120.00 |
| €100.00 | Germany 19% | €19.00 | €119.00 |
| €100.00 | France 20% | €20.00 | €120.00 |
| €100.00 | Spain 21% | €21.00 | €121.00 |
| €100.00 | Italy 22% | €22.00 | €122.00 |
Frequently asked questions
What is the difference between VAT and US sales tax?
VAT is collected at each stage of production in the UK, EU, and many other countries, but for a simple retail purchase it works like the forward calculation shown here — added on top of the net price. US sales tax is charged once, only at the final sale to the consumer, and rates are set by state and local government rather than nationally; use the separate Sales Tax Calculator for US rates.
Why do EU VAT rates differ by country?
Each EU member state sets its own standard VAT rate within EU minimum guidelines (currently at least 15%), plus reduced rates for specific goods like food, books, or children's items. The presets here (UK 20%, Germany 19%, France 20%, Spain 21%, Italy 22%, Netherlands 21%) are the current standard rates; always confirm the applicable rate for the specific product before invoicing.
How do I find the VAT already included in a price?
Use the reverse calculation: divide the VAT-inclusive gross price by (1 + rate ÷ 100) if you know the rate, or check a receipt that lists the net and VAT amounts separately.
Are reduced VAT rates supported?
Enter any rate directly in the VAT rate field — the presets are shortcuts for common standard rates, but you can type a reduced or zero rate (such as 5% or 0%) to match a specific product category.
VAT rates and rules change over time and vary by product category and country; this calculator applies a single rate you choose. Verify the current applicable rate for your transaction before using the result for invoicing or tax filing.