Practical example: discount before VAT
If a product costs 200 with a 10% discount, the new base is 180. At an illustrative 5% tax rate, VAT is 9 and the total is 189. Verify local rules for how discounts are treated.
These examples are educational. Check your actual requirements and verify important outputs before use.
Start with the correct base
For an exclusive price, VAT is the net price multiplied by the tax rate. A 100-unit net price at 5% VAT becomes 105 units in total.
Reverse an inclusive price
To remove 5% VAT from a total of 105, divide 105 by 1.05 to recover 100. Do not subtract 5% from the total: that produces a different result.
Check your invoice
Confirm the applicable tax rate, currency, rounding rules and whether each line item is taxable. The calculator is an aid, not tax advice.