VAT is an acronym for Value Added Tax. It is similar to a sales tax but VAT taxes the value added to the product at each different stage of production. Under the sales tax system, the taxes are placed on the entire final sales price of the product. Different countries apply the VAT at different percentages.

Find out the VAT rate for the specific country for which you are calculating VAT. You may do this quickest by searching online. The rate may also be printed on a sales receipt (see Resources).

Calculate the amount of VAT to apply to a purchase once you determine the rate and the pre-VAT price. Multiply the value of the tax rate (on a scale of zero to one) by the pre-VAT price. For example, a VAT of 12.5 per cent on a purchase of 100.00 is computed: .125 X 100.00 = 12.50.

Calculate the amount of VAT paid when the pre-VAT amount is unknown by first finding the pre-VAT price using the following formula (as noted by the Small Business Resource): 100 / (100 + rate) X final price = pre-VAT price. For example: 100 / (100 + 12.5) X 112.50 = 100.00

Find the VAT amount by subtracting the pre-VAT price from the final price. For example: 112.50 - 100.00 = 12.50

#### Tip

You can find VAT calculators or other VAT calculating tricks online.