Are you worried about how much is the VAT amount which should be added? Do you have a amount inclusive of VAT and don’t know how much is the VAT amount and Taxable Value? How to calculate VAT if price is VAT inclusive?
Here is a simple online VAT calculator for you. Just simply put you net amount and the VAT rate. It would calculate the amount of VAT to be added and if the price is inclusive of VAT then it can calculate the exact Taxable value as well as VAT Amount.
How this online VAT calculator works?
Using the online VAT calculator is very easy. All you should have is the amount i.e. the price and the rate of VAT. This online VAT calculator can calculate inclusive as well as exclusive VAT. You have to select the option of inclusive of VAT or Inclusive of VAT.
Exclusive of VAT
Exclusive of VAT amount is your pure price i.e. price before tax. for example if you want to sell an item at 100/- the exclusive of VAT price is 100/- and the tax amount would be in addition to this value. So the tax amount at 5% VAT would be 5/-. Taxable amount would be 100/- and the total amount would be 105/-
Inclusive of VAT
Inclusive of VAT amount is your price including the tax. Let’s take an example. If you are selling an item at 150/- and tax amount is included in that then. we have to calculate the taxable amount and the amount of tax. The total price should be 150/- so if we consider VAT rate to be 5% then The taxable amount would be Value inclusive of tax X 100 / (100+ tax rate) or (150*100/100+5) = 142.86/-
The tax amount would be Value inclusive of tax X tax rate/(100+ tax rate) or in this case 150*5/(100+5)=7.14/-
How VAT payment is calculated
If you are a registered business then you have to pay VAT. but this doesn’t mean that you have to deposit all the VAT you have collected. The VAT payment or VAT payable is calculated by total amount of VAT collected during a period minus total VAT paid during that period.
VAT Payable = Output VAT – Input VAT
VAT is collected while we sell items and VAT is paid while purchasing the items. So during a month if we have made a total purchase of say 1000/- and at 5% VAT rate we have paid 50/- as Input VAT and during same period we have sold these goods at 2000/- and collected a VAT of 100/- as Output VAT then VAT amount payable is Output VAT -Input VAT.
In our case the mount of VAT payable would be 50/- only. if the output VAT is more then Input VAT then you have VAT refundable and 0 VAT payable.
You can calculate VAT using the online VAT calculator given above or you can use Tally Prime which provides accurate VAT amount and helps us in making VAT compliant invoices for UAE, Saudi, Bahrain and Oman