How to Calculate The VAT Tax Amount

Calculate The VAT Tax Amount

A Value Added Tax or VAT is charged by European member countries for the purchase of goods and services. The VAT rates may vary depending on the European country you are making the purchases. The computation of the VAT tax is pretty straightforward once the tax rate is known. Use these tips to do your own calculations for VAT charged.

Step 1

Obtain the Value Added Tax rate for the European country you are visiting. Review your sales receipt and see if the rate is printed on it. If the rate is not on the receipt you can also look online for the VAT rate of the country.

Step 2

Calculate how much Value Added Tax will be charged on a purchase (if the pre-vat price is known). Use an Excel or other spreadsheet program or a calculator to perform this computation. Use the VAT rate; for example the UK charges a 17.5% sales tax. Obtain the purchase price, example 200.00, and calculate VAT: .175 X 200.00 = 35. The rate (in decimal) times the sale price equals the VAT that will be charged in our sample country - UK. The final price is 235.00 including VAT.

Step 3

Compute the VAT amount already charged on a purchase (if the final price is known with the VAT). Use the same sample data from above.

Calculate: 100/[100+17.5]X235=200.

The amount already charged is 35 or 235 ( final price) - 200 (before vat sale price).

Note that it is important to perform this calculation step by step to avoid confusing the numbers and terms.

Step 4

Find a free online calculator to compute the Value Added Tax amount. There are many free online services that provide a calculator for users to input the sale figures and tax rate to get the VAT amount. Use these calculators or compute the VAT yourself as outlined above.