VAT & Sales Tax Calculator

Amount

Country / region

Tax rate

Custom rate (%)

Amount includes tax

Tax amount: 0
Amount before tax: 0
Amount after tax: 0

📊 Tax Tip:

Different countries have different VAT/sales tax rates. Always verify the correct rate for your location. Some items may be tax-exempt or have reduced rates!

Understanding VAT vs Sales Tax

VAT (Value Added Tax) and Sales Tax are both consumption taxes, but they work differently. VAT is collected at each stage of production based on the value added, while Sales Tax is only collected once at the final point of sale to the consumer.

VAT vs Sales Tax Comparison

Aspect	VAT	Sales Tax
Collection Point	Each stage of production	Only at final sale
Used In	160+ countries worldwide	US, Canada (combined with VAT in some regions)
Visibility	Usually included in price	Added at checkout (US)
Tax Evasion	Lower risk (multi-stage collection)	Higher risk (single point)
Complexity	More complex to implement	Simpler for businesses

How VAT Works: Step-by-Step Example

Let's see how 20% VAT is applied through a coffee production chain:

1. Coffee Farmer	Sells beans for $10 + $2 VAT = $12	Pays $2 to government
2. Roaster	Sells for $20 + $4 VAT = $24	Pays $2 to government ($4 - $2 credit)
3. Cafe	Sells cup for $30 + $6 VAT = $36	Pays $2 to government ($6 - $4 credit)
Total VAT Collected by Government:		$6 (20% of final $30 value)

Standard VAT/Sales Tax Rates by Country

Country/Region	Standard Rate	Reduced Rate(s)
United Kingdom	20%	5%, 0%
Germany	19%	7%
France	20%	10%, 5.5%, 2.1%
Spain	21%	10%, 4%
Italy	22%	10%, 5%, 4%
Australia (GST)	10%	0% (food, health)
Canada (GST/HST)	5% (GST)	13-15% (HST varies by province)
United States	No federal VAT	0-10.5% (state/local sales tax)
Hungary (highest)	27%	18%, 5%

Using This Calculator Effectively

Add tax to a price: Enter the net price, select tax rate, leave "Amount includes tax" unchecked. Result shows gross price (price + tax).
Remove tax from a price: Enter the gross price, select tax rate, check "Amount includes tax". Result shows net price (price before tax).
Calculate tax amount: Both methods show the exact tax amount collected by the government.
Custom rates: Use the custom rate field for specific local taxes, reduced rates, or combined federal+state rates.

Common Tax Exemptions & Reduced Rates

Often 0% or Exempt

Basic food items
Children's clothing
Medical supplies
Educational materials

Often Reduced Rate

Restaurant meals
Hotel accommodation
Books and newspapers
Public transport

Full Rate Applied

Electronics
Clothing (adults)
Alcohol & tobacco
Luxury goods

Important Considerations for Businesses

B2B vs B2C: In many countries, VAT registered businesses can reclaim VAT paid on purchases (input tax credit), making the net tax burden zero for businesses.
Cross-border trade: Special VAT rules apply for international sales. EU has specific thresholds for distance selling.
Digital services: Many countries now apply VAT to digital products/services based on customer location, not seller location.
Thresholds: Small businesses below certain revenue thresholds may be exempt from VAT registration (varies by country).

Business Tools: Discount & Sale Price Calculator • Tip & Bill Split Calculator

⚠️ Disclaimer: Tax laws are complex and change frequently. This calculator provides estimates for general purposes. Always verify current tax rates and consult tax professionals for specific business or legal advice.