VAT Calculator
Calculate Value Added Tax (VAT) for European Union countries and international transactions. This calculator supports standard and reduced VAT rates used across EU member states.
VAT Summary
VAT Details
EU VAT Rates
Understanding Value Added Tax (VAT)
Value Added Tax (VAT) is a consumption tax levied on the value added to goods and services at each stage of production or distribution. It's used in over 160 countries worldwide and is the primary indirect tax system in the European Union.
How VAT Works
VAT Calculation Formula
VAT Amount = Net Price × VAT Rate
Gross Price = Net Price + VAT Amount
Net Price
Price before VAT
Excludes tax
What businesses charge each other
VAT Rate
Percentage applied to net price
Varies by country and product
Standard rates typically 17-25%
EU VAT Rate Types
Standard Rate
Applied to most goods and services:
- General merchandise
- Most services
- Non-essential items
- Typically 17-25% across EU
Reduced Rates
Lower rates for essential items:
- Food and beverages
- Children's clothing
- Books and newspapers
- Hotel accommodation
- Typically 5-10%
EU Standard VAT Rates by Country
| Country | Standard Rate | Reduced Rate | Super Reduced |
|---|---|---|---|
| Germany | 19% | 7% | - |
| France | 20% | 10%, 5.5% | 2.1% |
| United Kingdom | 20% | 5% | - |
| Italy | 22% | 10%, 5% | 4% |
| Spain | 21% | 10%, 4% | - |
| Netherlands | 21% | 9% | - |
| Hungary | 27% | 18%, 5% | - |
| Luxembourg | 17% | 14%, 8%, 3% | - |
VAT vs. Sales Tax
Value Added Tax (VAT)
- Collected at each stage of production
- Businesses can reclaim VAT paid on inputs
- More efficient collection system
- Used in EU and many other countries
Sales Tax
- Collected only at final sale to consumer
- Businesses bear the full tax burden
- Simpler but less efficient system
- Used primarily in the United States
VAT Registration Thresholds
Businesses must register for VAT when their taxable turnover exceeds certain thresholds. These vary by country but are typically around €10,000-€100,000 annually.
| Country | VAT Threshold | Notes |
|---|---|---|
| Germany | €22,000 | Annual turnover threshold |
| France | €85,800 | Can opt for voluntary registration |
| United Kingdom | £90,000 | Northern Ireland: £85,000 |
| Italy | €65,000 | Reduced for new businesses |
VAT Returns and Compliance
VAT-registered businesses must file regular VAT returns, typically quarterly or monthly. They charge VAT on sales and reclaim VAT paid on purchases, remitting only the difference to tax authorities.
International VAT Considerations
For international transactions, VAT rules become complex. The EU has special rules for intra-community supplies, and businesses dealing with multiple countries may need to register for VAT in multiple jurisdictions.
Key Takeaways for VAT
- VAT is collected at each stage of the supply chain
- Businesses can reclaim VAT paid on business purchases
- EU standard rates range from 17% (Luxembourg) to 27% (Hungary)
- Reduced rates apply to essential goods and services
- Registration thresholds vary by country
- International transactions have special VAT rules
- VAT returns must be filed regularly
- Non-compliance can result in significant penalties