[VIDEO] How to calculate the VAT included in an invoice?
Posted: Wed Dec 18, 2024 3:58 am
Learn how to calculate the VAT included in an invoice. Although it is a very simple calculation, it is advisable to take into account some details to avoid making mistakes. Take note!
In the simplest case, VAT is 17.3554% of the invoice.
There are some cases in which we must take into account particularities of the mechanics of VAT.
Calculating the VAT included in an invoice can have different reasons. For example, we may be interested in making a commercial offer or in carrying tokelau email list out an analysis of the fiscal impact of supplies and sales.
The calculation itself is not complicated. However, it is important to take into account certain considerations. In addition, we must have orderly processes , especially if we want to calculate the VAT included in many invoices. And, of course, it helps a lot to have the most up-to-date and practical tools for invoicing, taxes and accounting.
Download your FREE copy of the “Basic Kit for Keeping Your Accounting Up to Date”
How to calculate VAT included in invoices receivable
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START YOUR BUSINESS STEP BY STEP: With the help of expert David Tuneu, discover the best tool that exists for invoicing.
How to calculate VAT included in invoices receivable
In a very simplified case, calculating the amount with and without VAT is easy. If we assume that the tax rate is 21%, we will have to:
Calculate the VAT portion of the invoice knowing the amount to be charged. If 21 out of every 121 euros of the invoice correspond to VAT, you only have to do a simple rule of three. Multiply the total amount by 21 and divide it by 121. Since 21 divided by 121 equals 17.3554%, you simply have to apply that percentage to the total amount of the invoice.
Calculate the non-VAT portion by applying the remaining percentage. Simply subtract 17.3554% from 100%, which gives you 82.6446% of the invoice.
In general, the VAT included in the invoice represents 17.3554% of the amount.
An example of how to calculate the VAT included in the invoice
Let's look at an example to understand it better. Let's say you have a bill for 400 euros. Then, we'll say that:
The VAT included in that invoice would be 17.3554% of 400 euros, which gives us 69.42 euros.
The amount without VAT is 82.6446% of 400 euros, which gives us 330.58 euros.
You can check and see that 69.42 is 21% of 330.58 and that adding both amounts gives you the total bill of 400 euros.
Integrate accounting and business management in a single program with Sage 50 .
What happens with other types of tax?
In the Spanish case, in addition to the general tax rate of 21% , there are other reduced rates to which we would apply the same rule of three. They would give us the following results, for the other types of tax:
With the reduced VAT (10%) , you can calculate the VAT portion of the invoice by multiplying by 9.0909% (the result of dividing 10 by 110). The portion corresponding to the amount without VAT is the remaining amount (91.9191%). In our example of an invoice with a total amount of 400 euros, 36.36 would correspond to the VAT included in the invoice and 363.64 to the amount without VAT.
In the simplest case, VAT is 17.3554% of the invoice.
There are some cases in which we must take into account particularities of the mechanics of VAT.
Calculating the VAT included in an invoice can have different reasons. For example, we may be interested in making a commercial offer or in carrying tokelau email list out an analysis of the fiscal impact of supplies and sales.
The calculation itself is not complicated. However, it is important to take into account certain considerations. In addition, we must have orderly processes , especially if we want to calculate the VAT included in many invoices. And, of course, it helps a lot to have the most up-to-date and practical tools for invoicing, taxes and accounting.
Download your FREE copy of the “Basic Kit for Keeping Your Accounting Up to Date”
How to calculate VAT included in invoices receivable
PRESS PLAY!
START YOUR BUSINESS STEP BY STEP: With the help of expert David Tuneu, discover the best tool that exists for invoicing.
How to calculate VAT included in invoices receivable
In a very simplified case, calculating the amount with and without VAT is easy. If we assume that the tax rate is 21%, we will have to:
Calculate the VAT portion of the invoice knowing the amount to be charged. If 21 out of every 121 euros of the invoice correspond to VAT, you only have to do a simple rule of three. Multiply the total amount by 21 and divide it by 121. Since 21 divided by 121 equals 17.3554%, you simply have to apply that percentage to the total amount of the invoice.
Calculate the non-VAT portion by applying the remaining percentage. Simply subtract 17.3554% from 100%, which gives you 82.6446% of the invoice.
In general, the VAT included in the invoice represents 17.3554% of the amount.
An example of how to calculate the VAT included in the invoice
Let's look at an example to understand it better. Let's say you have a bill for 400 euros. Then, we'll say that:
The VAT included in that invoice would be 17.3554% of 400 euros, which gives us 69.42 euros.
The amount without VAT is 82.6446% of 400 euros, which gives us 330.58 euros.
You can check and see that 69.42 is 21% of 330.58 and that adding both amounts gives you the total bill of 400 euros.
Integrate accounting and business management in a single program with Sage 50 .
What happens with other types of tax?
In the Spanish case, in addition to the general tax rate of 21% , there are other reduced rates to which we would apply the same rule of three. They would give us the following results, for the other types of tax:
With the reduced VAT (10%) , you can calculate the VAT portion of the invoice by multiplying by 9.0909% (the result of dividing 10 by 110). The portion corresponding to the amount without VAT is the remaining amount (91.9191%). In our example of an invoice with a total amount of 400 euros, 36.36 would correspond to the VAT included in the invoice and 363.64 to the amount without VAT.