Add or remove VAT from any price instantly. Works for any VAT rate worldwide.
Enter a price excluding VAT — we'll calculate the VAT-inclusive price.
Value Added Tax (VAT) is a consumption tax applied to goods and services at each stage of the production and distribution chain. It is ultimately paid by the end consumer, but collected by businesses on behalf of the government at every transaction step. VAT is used in over 160 countries worldwide and is the EU's primary form of indirect taxation.
Unlike a simple sales tax (applied only at the final point of sale), VAT is charged at every stage of production. However, businesses can reclaim the VAT they pay on their purchases (input VAT), meaning only the value they add at each stage is effectively taxed. The net effect is that the full VAT burden falls on the consumer, not the businesses in the supply chain.
In everyday use, understanding VAT is essential for consumers checking receipts, small business owners pricing their services, freelancers working cross-border, and anyone shopping internationally or comparing prices that may or may not include tax.
Add VAT (net → gross):
Gross Price = Net Price × (1 + Rate / 100)
Remove VAT (gross → net):
Net Price = Gross Price / (1 + Rate / 100)
VAT Amount:
VAT = Gross Price − Net Price
Adding VAT: Net price £350 + 20% VAT = £350 × 1.20 = £420 gross. VAT = £70.
Removing VAT: Gross price £420 ÷ 1.20 = £350 net. VAT inside = £70.
VAT rates vary significantly across countries and even within product categories. Most countries have a standard rate, one or more reduced rates for essential goods, and a zero rate for items like food and medicine. The table below shows standard and common reduced rates for major economies.
| Country | Standard Rate | Reduced Rate(s) | Zero Rate |
|---|---|---|---|
| UK | 20% | 5% | 0% |
| Germany | 19% | 7% | 0% |
| France | 20% | 5.5% / 10% | 0% |
| Ireland | 23% | 9% / 13.5% | 0% |
| Netherlands | 21% | 9% | 0% |
| Spain | 21% | 10% | 0% |
| Italy | 22% | 5% / 10% | 0% |
| Sweden | 25% | 6% / 12% | 0% |
| Australia (GST) | 10% | N/A | 0% |
| Canada (GST) | 5% | N/A | 0% |
Rates as of 2024–2026. Always verify current rates with official government sources for compliance purposes.
For businesses and self-employed individuals, VAT has two sides: output VAT (charged to customers on sales) and input VAT (paid to suppliers on purchases). The difference is paid to or reclaimed from the tax authority each quarter or year.
When pricing services, a VAT-registered business must decide whether their quoted price is ex-VAT (the customer pays VAT on top) or inc-VAT (VAT included in the stated price). This distinction matters enormously for B2B vs. B2C sales: business customers can reclaim VAT, so they prefer ex-VAT pricing. Consumers cannot reclaim VAT and want to know their all-in price upfront.
Cross-border VAT in the EU has specific rules: sales to consumers in other EU countries are generally subject to VAT in the destination country above the One-Stop-Shop (OSS) threshold. Exports outside the EU are typically zero-rated. UK businesses post-Brexit must handle EU VAT separately. Always consult a tax advisor for cross-border transactions.
Price including VAT = Net Price × (1 + VAT Rate / 100). For a £100 item with 20% VAT: £100 × 1.20 = £120. The VAT amount itself is £20.
Net Price = Gross Price / (1 + VAT Rate / 100). For a £120 price at 20%: £120 / 1.20 = £100 net. VAT inside = £20.
The standard UK VAT rate is 20%. Reduced rate of 5% applies to home energy. Zero rate (0%) applies to most food, children's clothes, books, and newspapers.
GST is functionally identical to VAT — a consumption tax at each supply chain stage. Australia uses 10%, Canada uses 5% federal GST. Calculations are the same.
UK businesses must register once taxable turnover exceeds £90,000 (2024). Voluntary registration is possible below this threshold.
Yes. VAT-registered businesses reclaim input VAT (paid on purchases) from output VAT (charged to customers). HMRC refunds any excess input VAT.
Zero-rated (0%): most food, children's clothing, books, newspapers, public transport. Exempt (not VATable): insurance, financial services, education, healthcare.
Adding 5%: multiply by 1.05. £200 × 1.05 = £210. Removing 5%: divide by 1.05. £210 / 1.05 = £200 net.
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Calculation method: Adding VAT: Gross = Net × (1 + Rate/100). Removing VAT: Net = Gross / (1 + Rate/100). VAT Amount = Gross − Net. Disclaimer: For informational purposes only. VAT rates and rules change frequently. Always verify rates and compliance requirements with official tax authority sources or a qualified accountant. Last updated: September 2026.
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