How VAT is calculated
Adding VAT: net × rate. On 100 at 20 %, VAT is 20 and the gross amount is 120.
Removing VAT from a gross amount: gross ÷ (1 + rate). From 120 at 20 %, the net amount is 120 ÷ 1.2 = 100. A common mistake is to take 20 % off the gross amount: 120 − 20 % gives 96, which is wrong. The VAT share inside a gross price is one sixth (16.67 %) at a 20 % rate.
Standard VAT rates in Europe
The UK standard rate is 20 %, with a reduced rate of 5 % (for example domestic energy) and 0 % for many foods and children’s clothing. In the EU, standard rates range from 17 % in Luxembourg to 27 % in Hungary. Croatia, Denmark and Sweden charge 25 %, Germany 19 %, Austria and France 20 %, Spain and the Netherlands 21 %, and Italy and Slovenia 22 %. Most countries also have one or two reduced rates for food, accommodation, books and similar goods and services.
Prices for consumers must include VAT
When you show prices to consumers, they must be final prices including VAT. Quotes to businesses usually show net and VAT separately. If you advertise prices on Google, make sure the price in the ad matches the price on your website. A mismatch is a common reason for disapproved ads and Shopping products.
Holiday rentals and VAT
Short-term accommodation is usually taxed at a reduced rate in the EU, for example 13 % in Croatia and 7 % in Germany, but small private hosts below the national registration threshold often do not charge VAT at all. Booking platforms, however, charge VAT on their commission. Our Booking and Airbnb commission calculator shows what that means for your net income per stay.
Frequently asked questions
How do I remove VAT from a price?
What is 20 % VAT on 100?
Which currency does the calculator use?
What is the VAT rate in Croatia?
Updated: November 2026 · Supremio Digital, Zagreb
