How value added tax is calculated?

VAT calculation formula for VAT exclusion is the following: to calculate VAT having the gross amount you should divide the gross amount by 1 + VAT percentage (i.e. if it is 15%, then you should divide by 1.15), then subtract the gross amount, multiply by -1 and round to the closest value (including eurocents). read more

A value-added tax (VAT), known in some countries as a goods and services tax (GST), is a type of tax that is assessed incrementally, based on the increase in value of a product or service at each stage of production or distribution. read more

The VAT paid at each sale point along the way represents 10% of the value added by the seller. Value Added Tax Arguments In Favor of VAT. Those who favor value-added taxation make the argument that a VAT system encourages payment of taxes and discourages attempts to avoid them. read more

The method of calculating a value-added tax (“VAT”) depends on the form of the tax. Most VATs are of the “credit-invoice” type. (The other major type is the “subtraction method.”) The VAT in form is imposed along every seller in the chain from supply to ultimate purchaser. read more