Amount
VAT Rate (%)
Common VAT rates
Mode
Full breakdown (click to copy)
Decision Support
Confirm the correct rate for your country
VAT rates vary widely — UK 20%, EU 17-27% depending on country, UAE 5% — always confirm the exact current rate for your jurisdiction rather than assuming a standard figure.
Check whether your item qualifies for a reduced or zero rate
Many countries apply reduced VAT rates to essentials like food, books, or children's items — verify your product's classification before using the standard rate by default.
In India specifically, use GST, not VAT
India replaced VAT with GST in 2017 — if you're calculating tax for an Indian transaction, use the GST Calculator instead, which reflects the current India-specific structure.
➜ Next step: Applying VAT after a discount? Use the Discount Calculator first, then run the discounted price through this tool.
How to Use the VAT Calculator
- Enter the amount — either the pre-VAT price or the VAT-inclusive price depending on what you know.
- Enter VAT rate — the applicable rate for your country and product category. Standard rates vary from 5% to 27% across different countries.
- Select calculation mode — Add VAT (to find the price customers pay) or Remove VAT (to find the net price before VAT).
- Read the result — see net amount, VAT amount, and gross amount clearly separated.
- Use for pricing and invoicing — display VAT-inclusive prices to consumers and VAT-exclusive prices on B2B invoices.
🌍 Global VAT rates: UK: 20% standard (5% reduced for energy/children's items, 0% for food/books). EU average: 21% (Hungary 27%, Luxembourg 17%). Australia GST: 10%. UAE VAT: 5%. US has no federal VAT — uses state sales tax instead (0–10.25%).
Understanding VAT
📋 What Is VAT?
Value Added Tax — a consumption tax applied at each stage of the supply chain on the value added by that stage. Unlike sales tax (applied only at final sale), VAT is collected incrementally at each production and distribution stage.
🔄 How VAT Works
Manufacturer sells to wholesaler: charges VAT, remits to government. Wholesaler sells to retailer: charges VAT, claims back VAT paid on purchase, remits the difference. Retailer sells to consumer: same process. Consumer bears full VAT — businesses act as collectors.
📊 Standard vs Reduced Rates
Most countries have multiple VAT rates. UK: 20% standard, 5% reduced (home energy, children's car seats), 0% (food, books, children's clothing). The reduced and zero rates exist for social policy reasons — making essentials more affordable.
🏢 VAT Registration
Businesses must register for VAT once turnover exceeds the registration threshold. UK threshold: £85,000. EU varies by country (€10,000 to €92,000). Once registered, businesses charge VAT on sales, claim VAT on purchases, and pay the net difference to the government.
🌐 VAT on Digital Services
Digital services sold to consumers in a country are subject to that country's VAT regardless of where the seller is located. Amazon, Netflix, and Google collect local VAT even as foreign companies. This affects freelancers selling digital services internationally.
📅 VAT Returns
VAT-registered businesses file periodic returns (monthly or quarterly) showing VAT collected minus VAT paid, with the net amount due to the tax authority. Accurate record-keeping of all VAT invoices is essential for correct returns.
VAT for Businesses
VAT-inclusive vs VAT-exclusive pricing
B2C (business to consumer): always display VAT-inclusive prices. Consumers see the total they pay. B2B (business to business): quote VAT-exclusive prices. Your business customers will claim back the VAT, so they care about the net price. Mixing these conventions creates confusion and potential compliance issues.
Input VAT reclaim
VAT-registered businesses can reclaim VAT paid on business purchases — called input tax. This includes office supplies, equipment, professional services, and business travel. Accurate record-keeping with valid VAT invoices for every business purchase is essential for maximising input tax reclaim and reducing your overall VAT liability.
Partial exemption
Businesses that make both VAT-taxable and VAT-exempt supplies (e.g. a financial services firm that also provides taxable consulting) can only reclaim a proportion of input VAT. This 'partial exemption' calculation is complex and often requires professional accounting advice to calculate correctly and avoid penalties.
🧾 Valid VAT invoice requirements: Unique invoice number, date of issue, supplier's VAT registration number, supplier and customer name and address, description of goods/services, quantity and unit price, VAT rate applied, VAT amount, and total including VAT. Missing any element invalidates the invoice for input tax reclaim purposes.
VAT Formula
VAT Amount = Net Amount × VAT Rate ÷ 100. To go the other way — Net Amount (removing VAT from a gross price) = Gross Amount ÷ (1 + VAT Rate ÷ 100).
Worked example
£1,000 net price, 20% VAT (UK standard rate): VAT Amount = 1,000 × 20 ÷ 100 = £200. Gross Amount (inc-VAT) = £1,200.
Assumption: uses the standard rate you enter — always confirm whether your specific goods/services qualify for a reduced or zero rate in your jurisdiction before using a default standard-rate assumption.
Common Mistakes
Assuming one VAT rate applies everywhere
VAT rates vary by country and by product category within a country — always confirm the exact current rate rather than reusing a rate from a different jurisdiction or product type.
Confusing "add" and "remove" mode
If your amount already includes VAT, use "Remove VAT" — running an inclusive price through "Add VAT" double-counts the tax.
Quoting VAT-inclusive prices to business customers
B2B customers typically expect VAT-exclusive pricing since they'll reclaim the VAT — quoting inclusive prices in a B2B context can cause confusion or lost deals.
Using this for an Indian transaction
India uses GST, not VAT — use the GST Calculator for Indian tax calculations instead.
Frequently Asked Questions
What is VAT?
VAT (Value Added Tax) is a consumption tax levied at each stage of the supply chain. Unlike sales tax (collected only at point of sale), VAT is collected at every stage but businesses reclaim the VAT they've paid on purchases, so only the end consumer bears the final cost.
What is the VAT rate in the UK?
The UK has three VAT rates: Standard rate 20% (most goods and services), Reduced rate 5% (home energy, children's car seats, sanitary products), and Zero rate 0% (most food, books, children's clothing, public transport).
How do I remove VAT from a price?
Divide the VAT-inclusive (gross) price by (1 + VAT rate/100). For 20% VAT: Net = Gross ÷ 1.20. Example: £120 ÷ 1.20 = £100 net + £20 VAT. This calculator does this automatically in 'Remove VAT' mode.
What is the difference between VAT and GST?
Both are consumption taxes on goods and services, but they have different names and rates by country. UK/EU uses VAT. India, Australia, Canada, and Singapore use GST. The calculation method is identical — they differ mainly in rate and administrative details.
References
🏛️ UK Government (GOV.UK)
Official UK VAT rates and registration guidance — gov.uk/vat-rates
🏛️ European Commission
EU member-state VAT rates — taxation-customs.ec.europa.eu
Last updated: 15 July 2026 · VAT rates vary by country and product category — always confirm the current rate for your specific jurisdiction and goods/services.