VAT stands for Value Added Tax. Use VAT Calculator to add or subtract VAT value from initial amount. Also, it is totally free to use and calculate VAT anytime anywhere. Even more, it supports all country VAT calculation.
Online VAT Calculator
Tax is the only revenue that the government gets from its citizens. Also, there are direct taxes in the form of income tax that cannot be transferred to other people. On the other hand, indirect tax can be gained like a chain. So, the consumer becomes the last person on the list who pays these taxes.
VAT or Value added tax is an additional charge on the consumption of goods and services. It plays a crucial role to build up the pillars of the economic development of a country. Customers pay this tax in exchange for services.
In short, if you check your food bills, VAT is added separately. Also, it is paid by suppliers as well as consumers of goods and services. This tax is collected at different stages of the sale and purchase of goods. Currently, 160 countries have VAT in their economy. Therefore, you can use an online VAT calculator where you can enter your digits and know the final amount.
Pros and Cons of Value Added Taxation
Every act has some benefits as well as drawbacks. So, Let’s have a look at the different advantages and disadvantages of VAT. Firstly, let’s begin with the advantages.
Pros:
- It is a far better way to draw income tax. The extra money (VAT) that we pay for the products are revenue for the government. So, it is an effective way to earn tax.
- Provides stable flow of tax. The Value Added Tax is an effective as well as stable tax system. Because products are sold every day. Therefore, tax flow remains continues.
Cons:
- More spending: When VAT is added, consequently the product or service prices increases. Hence, it’s a drawback for taxpayers.
- VAT is a kind of hidden tax: The VAT included in the product’s price is a kind of hidden tax.
What is the Current Rate of VAT in the UK?
The current standard rate of VAT in the United Kingdom is 20%. It has increased from 15%. In the Value Added Tax calculator, you are free to set your VAT rates(%). The standard VAT rate keeps on changing to a balanced economy. Also, you can check the latest updates on UK VAT rates here.
Current Standard Rate of VAT in Other Nations
All nations have different economies. Hence, their government has introduced different VAT rates. There are also some nations like the USA that are free from VAT. Here is a list of VAT rates in some nations:
| Country | VAT Rate |
|---|---|
| Australia | 10% |
| India | 5.5% |
| Japan | 10% |
| Bangladesh | 15% |
| Argentina | 21% |
| Finland | 24% |
| France | 20% |
| Denmark | 25% |
| Greece | 24% |
| Ireland | 23% |
| Italy | 22% |
| Ghana | 15% |
| Iceland | 24% |
| Iran | 9% |
| New Zealand | 15% |
| Russia | 20% |
| Peru | 18% |
| Congo | 16% |
| Saudi Arabia | 5% |
| South Africa | 15% |
NOTE: This rate is taken in January 2020. VAT rates vary up and down in many countries. So, please refer to the VAT rate from a specific country’s government official site.
How to Calculate VAT?
Also, VAT can be calculated by using this formula:
Output tax is the percentage of the selling price increased by the seller on their product in the market.
Input Tax is the percentage of the cost of raw materials used to prepare final products.
Let’s understand it with some examples:
Example 1: Nelson got the raw materials for making a wooden table as inputs for $1000 and paid an input tax of 10%. Nelson made a table and sold it for $2000. He got an output of 10% on the selling price. Find VAT.
Solution:
10% of 2000 becomes $200
Hence, final payable amount of VAT = Output tax – Input tax = 200 – 100 = $100
Example 2: Steve bought a headphone for $2000 with a 7% tax. He sells it for $4000 and charged a 9% tax. Find VAT.
Solution:
Cost = $2000 and Tax = 7%
= ($7/100) x 2000
= $140
Selling price = $4000
The tax imposed = 9% of 4000
= ($9/100) x 4000
= $360
VAT = Input tax – Output tax
= $360 – $140
= $220
Advantages of a VAT Calculator
- Well, it’s not a tough job to use this application. This online VAT calculator is perfect for any online user. The economy runs on sales and purchases of goods and services. So, it will always be used by both producers as well as consumers.
- There is a chain of taxpayers. Even more, finding out your share is very complicated. Here, this online VAT calculator will give you accurate results. Also, it gives clear digits of the amount you need to pay.
- In addition, this calculator is used on the cash counters/EPOS Systems to ensure accuracy in data. Also, it gives you both gross and net amount separately.
- Most importantly, you can do both operations addition and subtraction in the VAT calculator.
- This calculator is just a pre-programmed application. No need to remind yourself of heavy calculations with a casual calculator. Also, it is not possible to set up an accountant program in a startup business. You can use this calculator and easily create your invoices with clarity.
How to use Online VAT Calculator?
There is no hard code to use this VAT calculator. But people often find it hard to calculate VAT manually. But using a calculator is very simple and fast. Just three steps and you will get your answer. Even more, the VAT calculator is an automatically designed application. Therefore, there are no chances of errors.
Let’s jump to the calculation process.
Firstly, you need to select your country. When you select the country then your currency symbol will be changed below. Then enter digits in terms of money. After that, you need to mention the rate of VAT in percentage(%). After that, you have to select the operation that you want to perform. That is add(+) or subtract(-) VAT. Lastly, click on “Calculate” button. As a result, you will get the net amount, VAT amount, and gross amount as an output.
Even more, you don’t need to remember the formula and its application step by step. Just open this VAT calculator and get your answers quickly. It’s a free online application for all online users.
