Add VAT to a net amount or work backwards from a gross price to find the VAT inside it. Works with any rate, including reduced rates.
Extracting VAT is the step people get wrong: a 22% VAT inside a gross price is not 22% of the gross. The correct net is gross ÷ 1.22 — this tool does the division for you.
Handy for invoicing, expense claims and checking receipts. EU standard rates currently range from 17% to 27% by country.
The rate depends on what is being sold as well as where, and the reduced categories are not intuitive. Food, books, medicines and public transport commonly attract a reduced rate while a superficially similar item does not, so the standard rate is an assumption worth checking against the invoice rather than the country.
For a business the tax is a flow rather than a cost: VAT charged on sales is offset against VAT paid on purchases, and only the difference is remitted. That is why a registered business quotes prices excluding VAT to other businesses and including it to consumers — the same price means different things to the two audiences.
Cross-border rules add a further layer. Sales to consumers in another EU country are generally taxed at the customer’s rate once a modest threshold is passed, while sales to a VAT-registered business are usually reverse-charged and carry no VAT at all. Neither is what the domestic rate here would suggest.
Frequently asked questions
How do I remove VAT from a gross price?
Divide by one plus the rate: with 22% VAT, net = gross ÷ 1.22. Subtracting 22% of the gross is the classic mistake — it removes too much.
Why isn't the VAT simply 22% of the gross price?
Because VAT is charged on the net amount, not the gross. The VAT inside a gross price is rate ÷ (1 + rate) of it — about 18% of the gross at a 22% rate.
What VAT rates apply in the EU?
Each country sets its own: standard rates currently range from 17% to 27%, and most countries add reduced rates for categories like food, books and transport.