Adding and removing VAT correctly
VAT (Value Added Tax) is a consumption tax added to most goods and services in over 170 countries. This tool converts between net (before tax) and gross (after tax) prices in either direction, and shows the tax amount itself — useful for invoicing, expense claims, pricing products, and checking receipts.
Worked examples
Adding: a freelancer charging 500 net at 20% VAT invoices 500 × 1.20 = 600, of which 100 is VAT to pass on to the tax authority. Removing: a business lunch receipt shows 57.50 including 15% VAT — the net cost is 57.50 ÷ 1.15 = 50.00 and the reclaimable VAT is 7.50.
The classic mistake
Removing VAT is not the mirror of adding it. Taking 20% off a VAT-inclusive price under-states the net amount, because the VAT was charged on the smaller net figure, not the gross. Always divide by (1 + rate) to go backwards — that is exactly what the "Remove VAT" mode does.