Understanding your calculation
Method, example and limitations
How the calculation works
Value-added tax can be added to a net amount or extracted from a gross amount. Extracting tax uses net = gross ÷ (1 + rate), not gross minus the same percentage.
Example to check
At 20% VAT, a net amount of 100 becomes 120 gross. Starting with 120 gross gives 100 net and 20 VAT.
Before using the result
Rates, exemptions, rounding and registration rules depend on jurisdiction and transaction type. The calculation alone does not determine the correct tax treatment.