In this post , we share info on
- Calculating a product final cost by adding VAT
- Calculating VAT from a product final cost
Its very important to keep in mind below meanings
- Product (excl VAT) : This is the cost of a product without VAT component
- Product (excl VAT) : This is the cost of a product with VAT component . Usually this is the value which we use for payments.
Consider ,
- VAT to be added is 12% , Product cost is $ 150
- Then the equivalent VAT amount to be added is calculated using the formula
VAT amount to add : (Product cost Excl. VAT) * ( VAT value ) 100 )
i.e, in our example : (150) * (12/100) = $ 18
- Final product cost , inclusive of tax is now calculated as
Product value (Inclusive VAT) : ( Product cost Excl. VAT) + ( VAT amount)
i.e, in our example : (150) + (18) = $ 168
Reverse Calculation : Calculating Product value excluding VAT
Consider ,
- VAT value is 12% , Product final cost inclusive of VAT is $168
- Then the equivalent product cost amount to be added is calculated using the formula.
Product value (Exclusive VAT) : (Product cost Inclusive VAT) / (1+( VAT /100))
i.e, in our example : (168) / (1+(12/100)) = $150
Hope this is useful.