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# How to calculate VAT on the gross amount

Updated February 21, 2017

Value added tax, or VAT, is a way of assessing taxes on the full sales price or gross amount of a purchase. It is used in many countries of the European Union as a way to collect revenues. The VAT, calculated as a percentage of the gross amount of the sale, is then added to the purchase price to get the total price of the sale. In many instances, VAT is included in the marked price of an item in a store or boutique.

Determine the gross amount of the item that is for sale.

Determine the VAT applicable for your area. This could vary from country to country or region to region. The VAT amount should be expressed as a percentage.

Multiply the gross amount of the item by the VAT. In the case of an item costing 100 euros with a 21 per cent VAT, the VAT would be 21 euros (100 x .21).

Add the VAT in euros to the gross amount. In this example, a 100 euro item with a 21 per cent VAT would have a total sale price of 121 euros.

#### Tip

In some cases you can have the VAT you pay on purchases while on travel to foreign countries refunded. Check the customs rules of the countries on your itinerary, and save your receipts.

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