VAT Calculator

VAT and GST are conceptually similar consumption taxes applied at each stage of the supply chain. GST replaced VAT in India and several other countries to create a unified national market.

VAT registration requirements vary by country. Typically, businesses whose taxable turnover exceeds a threshold must register for VAT. Registered businesses can charge VAT and reclaim VAT on business purchases.

Generally, you can reclaim VAT on goods and services used for your business. However, certain items like entertainment expenses and personal purchases may have restricted input VAT recovery.

VAT rates vary significantly by country. The UK standard rate is 20% with reduced rates of 5% for domestic fuel and 0% for essential items. EU countries typically have standard rates between 17% and 27%. Australia uses GST at 10%. Singapore charges 9% GST. Japan has a consumption tax of 10%. Some countries like the UAE and Saudi Arabia apply 5% VAT.

Tourists visiting VAT-charging countries can claim refunds on goods purchased for personal use when leaving the country, typically at airports or through third-party refund services. Exporters can usually apply a zero VAT rate on exports, meaning they can reclaim input VAT on related purchases without charging output VAT. Documentation such as tax invoices and customs declarations must be maintained.

Input VAT is the VAT paid on purchases of goods and services used in your business, while output VAT is the VAT you charge to customers on your sales. The net VAT payable to the tax authority is the difference between output VAT collected and input VAT paid. If input VAT exceeds output VAT, you may be eligible for a refund. This mechanism ensures that VAT is ultimately borne by the end consumer, not by businesses in the supply chain.

The UAE introduced VAT at a standard rate of 5% on January 1, 2018, with exemptions for certain sectors including healthcare, education, and residential real estate. Saudi Arabia similarly applies 5% VAT (temporarily increased to 15% from July 2020). Businesses with taxable supplies exceeding the mandatory registration threshold (AED 375,000 in UAE) must register for VAT and file regular returns. Exports and international transport are typically zero-rated.

The VAT flat rate scheme is a simplification measure available in some countries like the UK, where businesses pay a fixed percentage of their VAT-inclusive turnover to HMRC instead of calculating VAT on each transaction. The flat rate varies by industry sector (typically 4% to 14.5%). Businesses with annual taxable turnover below a threshold (e.g., £150,000 in the UK) are eligible. The scheme reduces administrative burden but may result in higher VAT payments for input-intensive businesses.

VAT return frequency varies by country: most EU countries require quarterly or monthly filing, the UK typically requires quarterly returns, and Gulf countries generally require quarterly or monthly submissions based on turnover. The return must detail output VAT collected, input VAT reclaimed, and the net amount payable or refundable. Late filing penalties can range from fixed fines to percentage-based charges on the outstanding VAT amount.

VAT-registered businesses must maintain records of all sales and purchases including tax invoices issued and received, VAT account showing output and input VAT calculations, import and export documentation, credit and debit notes, and adjustments. Records must typically be kept for 6 years (varies by jurisdiction). Tax invoices must contain specific information including VAT registration number, date, total amount, VAT rate, and VAT amount charged.