VAT is called value-added tax because it is charged whenever value is added to the product throughout the supply chain. Once the business collects the tax from the customer, it’s responsible for remitting the tax to the appropriate government agency by a set due date. Over 170 countries have adopted VAT, and in some Asia-Pacific countries and in Canada, it is known as goods and services tax (GST).

To find VAT rate by country, select the country from the drop-down menu on our online VAT calculator and click “Calculate”. The tax rate displayed is the standard VAT rate for that country. Depending on the location and the item you’re selling or buying, there might be reduced rates. For instance, in the United Kingdom, there are three main VAT rates: standard rate, reduced rate, and zero rate.

Certain countries, such as the United States and Australia, use different terms for indirect taxes. For example, the US applies a sales tax, while Australia uses GST; GST functions similarly to VAT, but it’s structured differently.

If you want to calculate indirect tax rates for countries that don’t use VAT, check out our sales tax calculator (for the US) and GST calculator (for Australia and Canada).

To calculate the VAT-inclusive price, add the VAT amount to your pre-tax price. First, identify the VAT rate and convert it to decimal form by dividing by 100. Then, add 1 to the VAT rate in decimal form, and multiply the result by your pre-tax price. This gives you the VAT-inclusive price.

Note: When using tax-inclusive prices with Stripe Tax, the amount your buyer pays remains constant, regardless of the tax amount.

The VAT-exclusive price is the price of a product or service before VAT is included. To determine this value from a VAT-inclusive price, identify the VAT rate and convert it to decimal form by dividing by 100. Then, take your VAT-inclusive price and divide it by the sum of 1 plus the VAT rate in decimal form. The final amount is your VAT-exclusive price.

For example, if a pair of headphones has a VAT-inclusive price of £120 and the VAT rate is 20%, you first convert the VAT rate to decimal form by dividing by 100, which is 0.20. Next, add 1 to the VAT rate in decimal form, and divide your VAT-inclusive price of £120 by that sum:

£120 ÷ (1 + 0.20) = £100

The result is your VAT-exclusive price of £100.

Yes, VAT rates might be different for certain goods, services, and industries. This VAT calculator uses the standard tax rate for the country selected.

If you need to calculate VAT for a specific type of product, you can do so through Stripe Tax. Refer to the list of product tax codes (PTCs) for more information about the different product types that Tax supports.

In many countries with VAT, foreign businesses – also referred to as remote sellers – are required to register to collect VAT as soon as they make their first taxable transaction in the country. However, some countries (e.g. Australia, Japan, and Canada) have monetary registration thresholds. Businesses with taxable sales below the registration thresholds are not required to register and collect VAT.

The tax collection obligations vary depending on the buyer country, product sold, and buyer status (customer or business). For example, foreign businesses must collect tax on sales of digital products to customers located in the European Union. But if the customer is a VAT-registered business, it is the customer’s responsibility to account for tax.

For more information on EU VAT, global tax compliance, and other tax topics, refer to our Tax guides. Or, let Stripe manage your VAT registrations and benefit from a simplified process that prefills application details from your Stripe account and automates tax collection.