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Reverse VAT Calculator

What is Reverse Vat Calculator

The reverse VAT calculator is a useful tool that aids business people in finding out about the VAT which is charged at a special rate. The term VAT stands for value-added tax and is charged on goods and services at different rates and varies in different parts of the world.

What does the Reverse VAT calculator do?

A reverse Vat calculator is a tool for recognizing the amount of VAT that has been charged on a special good or service. VAT rate varies in different countries and there needs to be a tool that can determine how much has been charged for a special good or service. Another task that can be done by the Reverse Vat calculator is to verify the net price and VAT. This is, however, possible only if there is enough information about the gross amount of goods and services charged with VAT.

How does the reverse VAT calculator work?

As already mentioned, reverse Vat calculator can be used for two purposes. The first is to add the value-added tax to the net amount of goods and services at the point of selling an item or a service. The Second use that can be made of this tool is in removing value-added tax from the gross amount, to which value-added tax has been already added. 

Reverse Vat Calculator

Reverse VAT calculation

A reverse vat calculator is an online tool that is free to use and provides users with two tabs. The first tab refers to the Reverse Vat calculator which removes the VAT amount and provides you with the net price. To calculate, users need to insert the final Vat inclusive piece in dollars.

The next tab refers to the VAT rate and is a rate in percent. Users should insert the Value added tax rate here and since it is not a fixed rate in different transactions, it should be inserted manually by the user.

The third tab is the VAT tab, in which the VAT rate should be inserted in dollars and may be even zero in the case of some special products.

The last necessary tab to be filled for calculating the Reverse Vat is the net before VAT price which comes in dollars naturally.

Normal VAT Calculation with Reverse Vat Calculator

In the reverse VAT calculator, there is another tab next to the “Reverse” tab which reads as “Normal”. This tab refers to Normal Vat calculation. To begin with this reverse Vat calculator, one needs to insert the “Net Before Vat Price” which refers to the net price, the original price of the good before adding VAT.

What comes next is the VAT rate percentage. Since users are looking for the final price after adding VAT, they should insert the VAT rate percentage.

Having filled these two blank fields in, the users will be provided with two rates. The first will be the VAT rate in dollars. In other words, after inserting the VAT percentage, the Reverse Vat calculator provides users with the extra price that will be added to the net price separately. It will also show the final VAT-inclusive price in dollars which eases the calculation process.

Frequently Asked Questions (FAQs)

It is necessary for the business to inform people of the value-added tax percentage they are paying. The reverse charge mechanism, on the other hand, aids people in understanding how much the net price is and in case of excluding the tax, how much they should pay.

A great advantage of working with a Reverse Vat calculator is bringing more clarity to a transaction which will also lessen the fraud. People can’t avoid paying VAT and it will be paid in a self-assessed manner. After all, Reverse VAT usually applies to VAT-registered businesses.

The reverse Vat calculator has several uses among which one can name:
Businesses have already reported the payment for supply in CIS.
Neither staff nor workers are applied and you are not an employment agency.
The services are either standard or reduced rate.
In case businesses apply the reverse VAT style, they need to mention it clearly in their invoice.

Vat is the value-added tax, which is not a constant figure in the case of different transactions. The amount may change at different periods of time. For example, the value-added tax was reduced and even double reduced during the COVID-19 period in many countries.

VAT or value-added tax is calculated by multiplying the net taxable amount by the applicable VAT rate. In the next step, the result should be divided by 100 to figure out the VAT rate.
Initial Price * VAT%: = Final price (including value-added tax)

Many businesses need to deduct VAT on purchases and the Reverse VAT calculator is the tool that can do this complicated tax. Using the Reverse VAT calculator helps businesses to collect tax on some goods or services from sellers or suppliers who should not actually pay for them. In other words, according to tax jurisdiction, some businesses are not supposed to pay the tax or it's not part of their commitments. Among such cases, one can name imported items and services that are not subject to passing through customs.

This is a conventional rule that suppliers charge VAT on items and services upon being purchased. The reverse VAT calculator, however, does the opposite. In other words, as a deviation from a generally accepted rule, sometimes the customers purchase an item without paying for VAT and in a separate invoice, report the VAT return through the reverse VAT calculation.

Although reverse VAT calculator provides businesses with an amazing service, there are also some risks that should be prevented in advance. Customers must be informed that any change in value-added tax in the form of reverse VAT, should be paid for, and insufficient information on invoices does mean a release from VAT obligations for customers.