While the United States does not place a value added tax, or VAT, on consumption, many countries throughout the world do. VAT is a set tax percentage that is added to a bill. You will often not see VAT mentioned in a receipt because it is automatically included in a bill's total cost. All you see is the final cost with the VAT included in the gross price. Using the VAT percentage of the country you are in, however, you can reverse calculate the tax to find out the original net price.
- Skill level:
Determine the VAT percentage used in your location. For instance, in the United Kingdom VAT for a receipt dated after January 4, 2011 is 20 per cent.
Divide the VAT percentage by 100. In the case of the United Kingdom, for example, you would divide 20 by 100. The resulting quotient is 0.2.
Add 1 to the quotient obtained in Step 2. Continuing with the United Kingdom example, add 1 to 0.2 for a result of 1.2.
Divide the gross price after tax by the number obtained in Step 3. For this example, if the gross price of your receipt or bill is 20, you would divide 20 by 1.2. The resulting quotient equals 16.67. So if your price with VAT included is 20, the price before VAT is added would be 16.67.
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