Price before VAT
v1precio_con_ivaivaprecio_sin_ivaHow it is worked out
Work out the price before VAT from a total that already includes it, and how much of what you pay is tax.
A price with VAT is the base multiplied by one plus the rate. Removing it is the opposite operation: divide the total by that same factor. At 20 %, divide by 1.20; at 19 %, by 1.19. What is left between the total and the base is the tax.
The expression that runs
precio_con_iva / (1 + iva / 100)The fields arrive with an example filled in: put your own numbers in and run it again. You can also edit the formula to fit your case.
What if the formula were yours?
This calculator is not hand-written: it is an Axioma formula. Open it in the editor to see how it is built, adapt it to your case and create the ones you need.
Step by step: from 119,000 back to the base
At a 19 % rate the factor is 1.19: the total is the base plus its 19 %. To undo it, divide: 119,000 over 1.19 is a base of 100,000. The tax is the difference, 19,000.
Division works for any rate because only the factor changes. At the 20 % standard rate in the United Kingdom you divide by 1.20, so a total of 120 is a base of 100 plus 20 of tax.
Why taking 19 % off the total gets it wrong
Subtracting 19 % from the total is the most common mistake, and it always gives a base lower than the real one. On 119,000, 19 % is 22,610, and 119,000 minus that is 96,390. The base was 100,000: 3,610 too much came off.
The reason is that the percentage is worked out on different amounts. The VAT was added on the base, the smaller figure; taking it off the total applies it to a larger one. That is why the way back is a division and not a subtraction.
What knowing the base is for
Sellers need to separate what is theirs from what they collect for the tax authority: revenue is the base, and the VAT is accounted for separately. Setting round prices with tax included, such as 50, means pulling the base out of every sale with this same calculation.
Buyers need it to compare quotes where some include VAT and others do not, or to know how much reclaimable VAT an invoice carries. In both cases the starting point is the total and the rate, which is exactly what this calculator asks for.
Frequently asked questions
- How do I know how much VAT I paid?
- Subtract the base from the total. With 119,000 at 19 %, the base is 100,000 and the VAT 19,000. You can also multiply the base by the rate: 100,000 times 0.19 gives the same 19,000.
- Which VAT rate should I use?
- The one for the product or service. Most countries have a standard rate and one or more reduced rates, and some goods are zero-rated or exempt. When an invoice breaks the tax down, the rate usually appears next to each line.
- Does it work for GST and other taxes included in the price?
- Yes, for any tax worked out as a percentage of the base and included in the price, such as GST in Australia at 10 %. Change the rate and the calculation is the same: the total divided by one plus the rate.