How to add VAT
VAT (value added tax) is charged as a percentage of the price without VAT, called the net price. The price with VAT is the gross price.
Example (UK, 20%): a freelancer bills £850 for a job. VAT is 850 × 0.20 = £170, so the invoice total is £1,020.
The calculator uses exact decimal arithmetic and rounds VAT half up to two decimals. HMRC lets businesses round VAT on an invoice to the nearest penny, so this matches what most invoicing software does.
How to remove VAT (reverse VAT)
When a price already includes VAT, you cannot just take the rate off. Divide by 1 plus the rate instead.
Example (UK, 20%): a receipt shows £120 including VAT. The net price is 120 ÷ 1.2 = £100, and the VAT is £20. Taking 20% off £120 would give £96, which is wrong, because the 20% was charged on the smaller net price.
Example (UAE, 5%): a hotel bill of AED 1,575 including VAT. The net amount is 1,575 ÷ 1.05 = AED 1,500, so VAT is AED 75.
The VAT fraction shortcut
The share of a VAT-inclusive price that is VAT is called the VAT fraction.
At 20% it is 20/120 = 1/6, so the VAT in any 20% price is one sixth of it. At 5% it is 5/105 = 1/21. At Saudi Arabia’s 15% it is 15/115 = 3/23. HMRC uses this term too, so it is handy when checking a receipt in your head: £60 including 20% VAT contains £10 of VAT.
VAT rates by country
These are the rates built into the calculator, checked on 22 October 2026. Every EU country also has reduced rates for some goods and services; the calculator lists standard rates only for the EU, so type a custom rate for anything else.
| Country | Standard rate | Notes |
|---|---|---|
| United Kingdom | 20% | 5% reduced rate, 0% zero rate |
| Germany | 19% | |
| France | 20% | |
| Ireland | 23% | |
| Spain | 21% | Mainland and Balearic Islands |
| Hungary | 27% | Highest in the EU |
| Luxembourg | 17% | Lowest in the EU |
| Finland | 25.5% | Since 1 September 2024 |
| Estonia | 24% | Since 1 July 2025 |
| Romania | 21% | Since 1 August 2025 |
| UAE | 5% | |
| Saudi Arabia | 15% | |
| Bahrain | 10% | |
| Oman | 5% | |
| Pakistan | 18% | Federal sales tax on goods |
EU law sets a minimum standard rate of 15% and lets each country set its own rate above that. Slovakia raised its standard rate to 23% in January 2025. No EU country changed its standard rate during 2026 up to the date we checked.
A note on Pakistan
Pakistan’s federal sales tax on goods works like VAT, with a standard rate of 18%. Some goods carry reduced rates or extra tax, for example when sold to unregistered buyers. Services are taxed by the provinces, such as Punjab and Sindh, each at its own rate. Choose a custom rate for those cases.
Tips for businesses
- Check whether a price is net or gross. In the UK and EU, prices shown to consumers must include VAT. Business-to-business quotes are often net.
- Round consistently. Round VAT on each line or on the invoice total, but use the same method every time.
- Zero-rated is not the same as exempt. Zero-rated sales are taxable at 0%, so you can still reclaim VAT on costs. Exempt sales are outside VAT, so usually you cannot.
- Cross-border sales can follow the customer’s country rules. The EU One-Stop Shop scheme, for example, charges the rate of the buyer’s country on many online sales to consumers.
This calculator does the arithmetic only. It is not tax advice; for registration or filing questions, use your tax authority’s guidance.
Related calculators
Selling in India? The GST calculator adds or removes GST and splits it into CGST, SGST or IGST. For US prices, where tax is added at the till, use the sales tax calculator. To see what a sale price really saves, try the discount calculator.