Value Added Tax
Valued added tax is a kind of consumption tax only on the valued added to a product. It is collected by the seller of the product.
This form of taxation is found in almost all countries in the world, though USA has no federal VAT, as the VAT varies from the different states.
Calculating the total price, including VAT
The total price of a product, including VAT, is given by:
Since VAT is a persentage, it must be written as a decimal number in the formula. For instance, the VAT of UK, which is 20 %, must be written as 0.20 in the formula.
The price of a product is £400, excluding VAT. What is the price when a customer buys it in a shop. (VAT = 20%)
Calculating the price, excluding VAT
The price of product excluding VAT is given by:
The total price of a product is £480 in a shop. What is the price without VAT (VAT 20%).
Calculating the amount of VAT
The amount of VAT is given by:
where “price” is the price of the product excluding VAT
VAT in different countries
Here is a list of the VAT in different countries.
In some countries there are two VAT rates, which are the standard rate and the reduced rate. The latter often applies for products and services like food, books, medicine, public transport and education.
|Country||Standard VAT Rate||Reduced VAT rate|
|Belgium||21%||12%, 6% or 0%|
|Bulgaria||20%||7% or 0%|
|Cyprus||17%||5% or 8%|
|Egypt||10% or 15%|
|Finland||24%||14% or 10%|
|France||19.6%||5.5%, 2.1% or 7%|
|Greece||23%||13% or 6.5%|
|Ireland||23%||13.5%, 9%, 4.8% or 0%|
|Italy||22%||10% or 4%|
|Canary Islands||7%||3% or 0%|
|People's Republic of China||17%||13%, 6% or 3%|
|Netherlands (Holland)||21%||6% or 0%|
|Norway||25%||15%, 8% or 0%|
|Poland||23%||8%, 5% or 0%|
|Portugal||23%||13% or 6%|
|Spain||21%||10% or 4%|
|Sweeden||25%||12%, 6% or 0%|
|Germany||19%||7% or 0%|
|Hungary||27%||18% or 5%|
|United Kingdom||20%||5% or 0%|
(Source: http://en.wikipedia.org/wiki/Value_added_tax#CanadaReduced, 12-17-2013)