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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:

total price=price*(1+VAT)

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.

Example
The price of a product is £400, excluding VAT. What is the price when a customer buys it in a shop. (VAT = 20%)
total price=price*(1+VAT)=400*(1+0.20)=400*1.20=480

Calculating the price, excluding VAT

The price of product excluding VAT is given by:

price=frac{total price}{1+VAT}


Example:
The total price of a product is £480 in a shop. What is the price without VAT (VAT 20%).
price=frac{total price}{1+VAT}=frac{480}{1+0.20}=frac{480}{1.20}=400

Calculating the amount of VAT

The amount of VAT is given by:

VAT amount=price*VAT
where “price” is the price of the product excluding VAT

VAT calculator

Price (excluding VAT): 
Total price (including VAT): 
VAT rate: 

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.

CountryStandard VAT RateReduced VAT rate
Australia10%0%
Belgium21%12%, 6% or 0%
Bulgaria20%7% or 0%
Canada5%4.5%
Cyprus17%5% or 8%
Denmark25%
Egypt10% or 15%
Finland24%14% or 10%
France19.6%5.5%, 2.1% or 7%
Greece23%13% or 6.5%
Ireland23%13.5%, 9%, 4.8% or 0%
Island25.5%7%
Israel18%0%
Italy22%10% or 4%
Japan5%
Canary Islands7%3% or 0%
People's Republic of China17%13%, 6% or 3%
Netherlands (Holland)21%6% or 0%
Norway25%15%, 8% or 0%
Poland23%8%, 5% or 0%
Portugal23%13% or 6%
Spain21%10% or 4%
Sweeden25%12%, 6% or 0%
Germany19%7% or 0%
Hungary27%18% or 5%
United Kingdom20%5% or 0%
Austria20%10%

(Source: http://en.wikipedia.org/wiki/Value_added_tax#CanadaReduced, 12-17-2013)