Value Added Tax (VAT) is a consumption tax assessed incrementally on goods and services throughout the supply chain. For commercial invoicing, bookkeeping, and accounting, businesses frequently need to add tax to a net quote (VAT exclusive) or extract the embedded tax portion from a customer receipt (VAT inclusive). This calculator handles both operations instantly across UK, European, and custom global tax percentages.

### Core Mathematical Formulas

Depending on your transaction requirements, calculations apply standard proportional arithmetic: 1. **VAT-Inclusive Extraction (Remove VAT from Gross):** $$\text{Net} = \frac{\text{Gross}}{1 + \frac{\text{VAT Rate}}{100}}$$ $$\text{VAT} = \text{Gross} - \text{Net}$$ 2. **VAT-Exclusive Addition (Add VAT to Net):** $$\text{VAT} = \text{Net} \times \left(\frac{\text{VAT Rate}}{100}\right)$$ $$\text{Gross} = \text{Net} + \text{VAT}$$

### Worked Invoicing Examples

- **Example 1: Inclusive Extraction (UK Standard 20%):** - Stated Gross Amount: **£120.00** - $\text{Net} = 120 / 1.20 = \mathbf{£100.00}$ - $\text{VAT} = 120 - 100 = \mathbf{£20.00}$ - The receipt includes £100 net revenue and £20 output tax owed to HMRC. - **Example 2: Exclusive Addition (Germany Standard 19%):** - Base Net Quote: **€500.00** - $\text{VAT} = 500 \times 0.19 = \mathbf{€95.00}$ - $\text{Gross} = 500 + 95 = \mathbf{€595.00}$ - Invoice total billed to the client is €595.00.

### In-Browser Processing Guarantee

All tax arithmetic executes locally inside your web browser. No invoice amounts, client rates, or currency figures are transmitted across the internet or stored in external databases.