Value added tax (VAT) is a tax that is included in the price of every product and service. It is calculated by the seller when selling goods (works, services, property rights) to the buyer. The seller, in addition to the price of the goods (works, services, property rights), presents to the buyer the VAT amount calculated at the established tax rate. This amount begins to flow to the budget before the final sale to the buyer, since the tax on its part of the value ‘added’ to the cost of purchased raw materials, works and services necessary for production is paid to the budget by everyone who participates in the production of goods, work or services for Various stages of production of this product..
How the VAT calculator works
Using this calculator, you can both calculate VAT to the amount, and extract VAT from the amount. All calculations are saved on this page.
Formula : VAT = Taxable Amount × VAT Rate / 100
Example calculation: let’s say you bought an item for 5,000 dollars.
Above, the seller added VAT in the amount of (20%) – 5000 * 20% = 1000 dollars.
The total cost of goods with VAT 5000+ 1000 = 6000 dollars.