Business2026-09-13 · 2 min read
VAT-inclusive and exclusive prices: formulas and examples
Learn how to add VAT or extract it from a total using 1,000 and 1,200 examples, and avoid subtracting the rate from a VAT-inclusive price.
Add VAT, or take it back out
Enter one amount and read both directions. The left column treats your figure as VAT-excluded; the right treats it as VAT-included.
How this is calculated
To add VAT, multiply by the rate. To strip it, divide by one plus the rate — subtracting the rate from a gross figure is wrong and understates the tax. At 20%, VAT is one sixth of the gross amount, not one fifth.
Questions
- Which rate applies to my product?
- Rates are set by category and change more often than most sellers expect. Confirm the current rate for your specific goods with the tax authority or your accountant before you file anything based on it.
- Why is the two-direction result different?
- Because the base is different. Adding 20% to 1000 gives 200; the VAT inside a gross 1000 is 166.67. Same rate, different starting figure.
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