How to calculate the VAT on an invoice?

The invoice is an important part of the purchasing process because it specifies all the information and the price. The value-added tax must be included in this document. Many people have doubts about this. If you are one of these people, we will explain how to calculate the VAT on an invoice.

What is VAT?

If you are not sure what value-added tax (VAT) is, here is a definition.
It is a tax, levy, or additional amount that must be paid for each product or service.

How to easily calculate the VAT on an invoice?

It is necessary for you to understand how this calculation is done because it is common in the buying and selling system. It will be useful to you if you have a business, if you are a director, if you want to create a business or simply as a citizen. We give you several ways to do it in a simple and fast way.

Price including VAT (all taxes included):

If the price indicated is inclusive of VAT, then the VAT is included in the final price. That is to say, it is the one that already appears on the invoice when you are going to buy one or more products. If you want to calculate it, just pay attention to the price and the percentage amount, because they can vary.

Start by dividing this amount and the VAT percentage. But how do you do this? It's simple. If the amount including VAT is €2,000 and the VAT percentage is 10%, you divide the price including VAT (€2,000) by 1,10. This gives you the price excluding VAT, i.e., €1,818.18. You must subtract the result, i.e., €1,818.18, from the invoice amount including VAT (€2,000).

This will give you €181.82, which means that this last amount is the VAT to be included in the invoice. If the VAT percentage is 20%, you must divide it by 1.20. If it is 15%, it will be 1.15. The idea is to add the number 1 to the total percentage.

Price before tax :

If the price is exclusive of tax, the VAT is not included in the price. The VAT must then be calculated. This may seem difficult, especially if you are just starting. However, once all the figures are clear, it will become easier. To calculate the VAT on the price before tax, you need to multiply the sales price before tax by the applicable VAT rate to get the sales price including tax.

But how do you check that you have calculated the price including VAT correctly? That's easy too. Let's take the example above with the invoice of €2,000 including VAT. In this case, you need to add 10% (VAT rate), i.e., €181.82 to the price excluding VAT (€1,818.18).
This way, you confirm that you have done things right.

Adding the VAT

Now you want to add the VAT percentage to the price of one or more items. This is not as complex as you might think. To do this, you need to multiply the base price of these products by the percentage. If it is 10%, you multiply it by 0.10.

Let's assume that the product before tax (without VAT) is worth €1,215 and that the VAT percentage is 10%. You multiply the €1,215 by 0.10, which gives you €121.5. This means that the €121.50 is the VAT amount. You still don't understand? Let's explain with the example above for clarity.

Let's imagine that the price before tax is €1,818.18 (as in the previous example) and that the VAT rate is 10%. You must multiply the €1,818.18 by 0.10%, which will give you €181.82, which will be the VAT amount.
Adding €1,818.18 plus €181.82 gives you the invoice price of €2,000 including VAT.

Base price plus VAT

You can also make the calculation between the base price and the VAT. The operation, in this sense, consists of multiplying the price without VAT of the product by 1.10 (adding the number 1 to the percentage). That is to say, €1,818.18 by 1.10 will give you €2,000.


As you have seen, there are several ways of calculating the VAT on an invoice. We have already explained the different options you have to do this. We, therefore, recommend that you do this in advance if you are a contractor, self-employed, or director.

Planning is the key to keeping a correct and solvent accounting. Today, there are many programs, software, tools, or platforms that will help you to make this calculation, and In-Mobility is the ideal tool for this. But it is always good to know how it works and how to calculate it manually.

In-Mobility automatically and effortlessly calculates the VAT on your invoices.

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