How is VAT calculated?

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    David Ashan
    Beginner
    US

    How is VAT calculated?

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      Linda
      Beginner
      US

      To calculate VAT, you simply multiply the sale price of the product or service by the VAT rate as a decimal (for example, if the VAT rate is 20%, the decimal equivalent would be 0.20). For example, if you were selling a product for 100 euros with a VAT rate of 20%, the calculation would look like this:
      100 * 0.20 = 20

      Jason
      Enhanced
      none

      Value Added Tax, is calculated by determining the taxable value of a product or service and then multiplying that value by the VAT rate. The taxable value is obtained by subtracting the cost of the goods or services from the selling price. In other words, the formula for calculating VAT is:

      VAT = VAT rate * taxable value

      As an example, let’s say a product is sold for $100 and has a VAT rate of 20%. The calculation would be:

      VAT = 20% * $100 = $20

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