Question 1

How do I add VAT to a price?

Accepted Answer

To add VAT to a net (excl. VAT) price: Gross price = Net price × (1 + VAT rate / 100). Examples at 20% VAT: £100 net → £100 × 1.20 = £120 gross. £250 net → £250 × 1.20 = £300 gross. The VAT amount is the difference: £120 − £100 = £20. At 23% VAT: £100 × 1.23 = £123; VAT = £23. At 5% VAT (e.g. UK reduced rate): £100 × 1.05 = £105; VAT = £5. The VAT calculator handles any rate — just enter the net amount and the rate.

Question 2

How do I remove (extract) VAT from a gross price?

Accepted Answer

To extract VAT from a gross (incl. VAT) price: Net price = Gross price / (1 + VAT rate / 100). VAT amount = Gross − Net. Examples at 20%: £120 gross → £120 / 1.20 = £100 net; VAT = £20. Common mistake: do NOT multiply the gross price by the VAT percentage to get the VAT amount. Example (wrong): £120 × 20% = £24 (incorrect). Correct: £120 / 1.20 = £100; VAT = £120 − £100 = £20. The percentage method (gross × rate%) gives a different answer because VAT is calculated on the net (ex-VAT) price, not the gross price.

Question 3

What are the current VAT rates in Europe?

Accepted Answer

Standard VAT rates in Europe (2025): Hungary 27%, Sweden/Denmark/Croatia/Norway 25%, Finland/Iceland/Greece 24%, Ireland/Poland 23%, Portugal/Slovenia 22%, Italy/Belgium/Latvia/Lithuania 21%, Spain/Netherlands/France/Czech Republic/Slovakia/Austria/Estonia/UK 20%, Germany/Cyprus/Luxembourg/Romania 19%, Malta 18%, Switzerland 8.1%. Most countries also have reduced rates (5–15%) for essential goods (food, medicines, children's products) and sometimes a super-reduced rate (2–5%) or zero rate. The UK left the EU but retained its standard 20% VAT rate post-Brexit.

Question 4

What is the difference between VAT and sales tax?

Accepted Answer

VAT (Value Added Tax) and sales tax both tax consumption, but are structured differently: VAT: collected at every stage of production — each business pays VAT on what it buys and charges VAT on what it sells; only the 'value added' at each stage is taxed. Businesses reclaim the VAT they pay on purchases (input VAT). The consumer bears the full VAT. Sales tax (US model): collected only at the final point of sale to the consumer. Businesses buying for resale are exempt. Rates set by US states/counties — no federal sales tax. Key difference: VAT is a consumption tax charged on the final consumer but collected incrementally throughout the supply chain; sales tax is collected only once, at the point of sale to the end consumer.

VAT Calculator

Standard VAT rates by country (2025)

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Country	Standard rate	Reduced rate(s)
United Kingdom	20%	5% (domestic energy, children's car seats); 0% (food, books, children's clothing)
Germany	19%	7% (food, books, public transport, hotels)
France	20%	10% (restaurants, construction); 5.5% (food, books); 2.1% (medicines)
Spain	21%	10% (food, hotels, transport); 4% (essential food, medicines, books)
Italy	22%	10% (food, pharma, tourism); 5% (some services); 4% (essential food)
Netherlands	21%	9% (food, books, medicine, art)
Sweden	25%	12% (food, hotels); 6% (books, newspapers, transport)
Ireland	23%	13.5% (hospitality, fuel); 9% (newspapers, food service); 0% (food, clothing)