VAT / Sales Tax Calculator
Add tax onto a net amount, or extract it from a gross amount.
How VAT is calculated
Adding VAT is straightforward: tax = net × rate, and gross = net + tax. Extracting VAT works the other way around — since the gross amount already includes tax calculated on the net, dividing the gross directly by the rate would overstate it. Instead the net is found first, as gross ÷ (1 + rate/100), and the tax is simply the difference between the gross and that net.
VAT-registered businesses can generally reclaim the input VAT they pay on their own purchases, offsetting it against the output VAT they charge customers — which is why, for a B2B transaction between two VAT-registered businesses, the effective cost of VAT usually nets to zero once both sides file their returns. For an end consumer who isn't VAT-registered, there's no such recovery mechanism, so VAT is a genuine, permanent addition to the price they pay. To verify a business's VAT registration before invoicing, see the VAT Number Validator, and for building a full multi-line invoice with per-line tax rates, see the Invoice Calculator.
Frequently asked questions
- What's the difference between adding and extracting VAT?
- Adding VAT starts from a net (pre-tax) amount and calculates the tax on top, giving you the gross total. Extracting VAT starts from a gross (tax-included) amount — like a receipt total — and works backward to find how much of it was tax.
- Why isn't extracted VAT just gross × rate?
- Because the rate applies to the net amount, not the gross. Extracting divides the gross by (1 + rate/100) to find the net first, then the tax is the difference — multiplying the gross directly by the rate overstates the tax.
- Does this work for sales tax too, not just VAT?
- Yes — the math is identical for any percentage-based tax added on top of a price, whatever it's called locally (VAT, GST, sales tax).
- Can I use this in my own app?
- Yes — every calculator on Stupidly Clever has a matching REST API and MCP tool that runs the same underlying logic.
- What are the standard VAT rates in major countries?
- Standard VAT rates vary widely — the UK and France both apply 20%, Germany applies 19%, most EU countries fall in the 17–27% range, and rates outside Europe vary further (Australia's GST is 10%, for example). Always check the applicable rate for the specific country and transaction type.
- What is the difference between VAT and sales tax?
- VAT is collected incrementally at each stage of production and distribution, with registered businesses reclaiming the VAT they paid on inputs — so only the "value added" at each stage is effectively taxed. Sales tax (used in the US) is instead collected only once, at the final point of sale to the end consumer, with no equivalent recovery mechanism for businesses along the supply chain.
- What is input vs output VAT?
- Output VAT is the VAT a business charges its customers on sales. Input VAT is the VAT a business pays on its own purchases and expenses. A VAT-registered business periodically reports both, remitting the difference (output minus input) to the tax authority — or reclaiming a refund if input VAT exceeds output VAT.
- What is the reverse charge mechanism?
- The reverse charge shifts responsibility for accounting for VAT from the seller to the buyer, commonly used for cross-border B2B services within the EU. Instead of the seller charging VAT, the buyer self-assesses the VAT on their own return — this avoids the seller needing to register for VAT in the buyer's country for a single transaction.