Addition of VAT
VAT, or Value Added Tax, is a consumption tax placed
on a product whenever value is added at each stage of the supply
chain, from production to the point of sale. It's a form of indirect
tax.
Addition of VAT:
To calculate the value including VAT:
1. Multiply the value by 1 + VAT Percentage.
2. For example, if the VAT rate is 21% (like in the Netherlands), you
would do value X 1.2.
3. For instance, €150 value X 1.2 = €181.5 , This is the amount including
the VAT.
Removal of VAT
VAT can be removed or reclaimed by businesses in
certain circumstances, such as exportation or when the product or
service is exempted from VAT.
Example of Removal of VAT:
To calculate the amount excluding VAT:
1. Divide the amount by 1 + VAT Percentage.
2. For example, if the VAT rate is 21% (like in the Netherlands), you
would do amount / 1.2.
3. For instance, €180 amount / 1.2 = €148.7, this is the amount
excluding VAT.