VAT inclusive vs. VAT exclusive: what is the difference?

Distinguish a net price plus VAT from a gross VAT-inclusive price and compare quotations on the same basis.

By Calculadoras.Tools Published March 14, 2026 4 min read

A VAT-exclusive price is the taxable base before VAT. “500 plus 20% VAT” means VAT of 100 and a gross total of 600.

A VAT-inclusive price already contains the tax. If the total is 600 at 20%, the net price is 600 / 1.20 = 500; VAT is 100.

The common mistake is to compare one supplier’s net quotation with another supplier’s gross quotation. Convert both to the same basis and check whether delivery, fees and other taxes are included.

Use multiplication to add VAT and division to extract it:

gross = net x (1 + rate)
net = gross / (1 + rate)

The VAT calculator has separate add-tax and extract-tax modes. Legal display requirements and the applicable rate vary by jurisdiction.