VAT Calculator
Enter an amount and VAT rate above
Standard VAT rates by country
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What Is VAT?
VAT (Value Added Tax) is a consumption tax applied at each stage of production and distribution. It's used by over 170 countries. Unlike US sales tax (which is added at the point of sale and varies by state), VAT is built into prices throughout the supply chain. The end consumer ultimately pays VAT, but businesses collect and remit it to the government at each transaction step.
Add vs. Remove VAT
Adding VAT (net to gross)
Start with the price before tax. Use this when you're a business setting prices exclusive of VAT.
Price incl. VAT = Price excl. VAT x (1 + VAT rate)
Example: 100 x 1.20 = 120 (at 20% VAT)
Removing VAT (gross to net)
Start with the VAT-inclusive price. Use this when you see a price tag and need to find the net amount for accounting.
Price excl. VAT = Price incl. VAT / (1 + VAT rate)
Example: 120 / 1.20 = 100 (at 20% VAT)
Frequently Asked Questions
What's the difference between VAT and sales tax?
Sales tax is only collected once at the final sale to the consumer. VAT is collected at every stage of production, but businesses can reclaim the VAT they paid on inputs. The end result is similar for consumers — they pay a percentage on top of the base price — but the collection mechanism differs. VAT is generally harder to evade because each business in the chain verifies the prior stage's tax payment.
Does the US have VAT?
No. The US uses sales tax instead, which varies by state and local jurisdiction (ranging from 0% to over 10%). The US is one of the few developed nations without a federal VAT or GST system. Some economists and policymakers periodically debate introducing a VAT, but it has not been implemented at the federal level.