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How to Take VAT Off a Price

Updated February 21, 2017

Value Added Tax (VAT) is a consumption tax in Europe. A percentage of taxable goods and services is collected and sent to the government's taxation authority. When a receipt is issued for an item, it doesn't always show the amount of VAT paid. If you are a buyer of taxable goods and sell items that have VAT included in the price, you'll need to calculate the amount of VAT paid if you want to claim the VAT back from the government. Taking the VAT off the price involves a little basic math.

Turn the VAT rate into a decimal. For example, a VAT rate of 17.5 per cent is 0.175.

Add 1 to the VAT rate. In the above example, 1 + 0.175 = 1.175.

Divide the price of the item by the amount you calculated in the previous step. For example, if the price of the item was £117.50, then £117.50/1.175 = £100.

Subtract the amount you calculated in the previous step from the price of the item: £117.50 - £100 = £17.50. This is the amount of VAT paid.

Tip

Check with your taxation authority to see if they issue VAT fractions to help you calculate the VAT-exclusive price. For example, the standard rate VAT fraction in the United Kingdom as of November 2010 is 7/47. With the VAT fraction, multiply the price of the item by the fraction to get the VAT paid: £117.50 x 7/47 = £17.50.

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About the Author

Stephanie Ellen teaches mathematics and statistics at the university and college level. She coauthored a statistics textbook published by Houghton-Mifflin. She has been writing professionally since 2008. Ellen holds a Bachelor of Science in health science from State University New York, a master's degree in math education from Jacksonville University and a Master of Arts in creative writing from National University.