How to calculate VAT
| Starting amount | Formula | Example: 100 at 20% |
|---|---|---|
| Net (excluding VAT) | VAT = net × rate | 100 × 0.20 = 20 VAT; gross 120 |
| Gross (including VAT) | Net = gross ÷ (1 + rate) | 100 ÷ 1.20 = 83.33 net; 16.67 VAT |
Taking 20% of a gross price gives the wrong answer: 20% of 120 is 24, but the VAT inside 120 is 20.
Rates by country
The calculator includes standard rates for more than 140 countries and the reduced rates of European countries. A few cases work differently:
- United States: There is no federal VAT. States charge sales tax, and counties and cities add their own. Pick a state, then add the local rate for the delivery address.
- Canada: The federal GST applies everywhere; some provinces combine it into a single HST, others add a provincial sales tax.
- Reduced rates: Food, books, medicines and other goods are often taxed at lower rates. Check which rate applies to your product with your tax adviser.
- No VAT: Some territories, such as Hong Kong, Qatar and Kuwait, have no VAT or GST.
Rates change: Finland, Estonia, Romania and Slovakia have raised their standard rates in the last two years. The date the rates were last checked is shown below the calculator.
To see how a discount and tax change your profit, try the profit margin calculator.
Frequently asked questions
How do I remove VAT from a price?
Divide the gross price by one plus the VAT rate. At 20%, 120 ÷ 1.20 = 100 net, so the VAT is 20.
What is the difference between VAT, GST and sales tax?
VAT and GST are charged at each stage of the supply chain, with businesses reclaiming the tax they pay. US sales tax is charged once, on the final sale to the consumer, by states and local governments.
Where do the rates come from?
Standard rates come from PwC’s Worldwide Tax Summaries, European reduced rates from the Tax Foundation, US rates from the Tax Foundation’s midyear 2026 data and Canadian rates from the Canada Revenue Agency. The sources are listed under the calculator.
Which US sales tax rate should I use?
Sales tax depends on the delivery address: the state rate plus any county and city rates. The calculator shows each state’s rate and its average local rate; enter the exact local rate if you know it.
Last updated: 31 October 2026 · By the Offerneta team