Value added tax, or VAT, is charged on goods and services. Many European nations charge the VAT. The regulatory minimum VAT that an European Union member nation can charge is 15 per cent and 5 per cent for the reduced rate. In many countries, this tax is rolled into the price of the merchandise, so you may not know how much VAT you are actually paying. Since VAT is a simple percentage calculation, you can perform the calculation in reverse to determine the VAT charged.
- Skill level:
Get the VAT rate in the country where the purchase occurred. This can be found by contacting the country's VAT authority or by reviewing the information online.
Divide the VAT rate by 100 to convert it into decimal format. For example, the United Kingdom's VAT is 20 per cent. This would be converted to 0.20.
Multiply the total bill by the decimal rate. In the example, if your total bill was 500 British pounds, then the result is 100 (500 x 0.20).
Calculate the VAT you were charged. Add one to the decimal rate and divide this number into the previous calculation. In the example, the VAT charged is 83.30 British pounds: 100 / (1 + 0.20).
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