VAT Rate Update: Gross Price 0.21 (Pound, Euro) Currently Has a 42% VAT Rate. If Rate Is Changed to 22% Calculate: New Gross Price, New VAT Amount, Net Price

Calculate new gross price, value of the VAT, net amount

Calculate the Gross Amount 0.21 with a different VAT Rate: from 42% to 22%

VAT. Gross Amount. Net Amount.

  • VAT = Value Added Tax is a tax charged of each economic agent involved in the business cycle and transferred to the state budget. VAT is charged as a percentage (VAT rate) of value and added at every level of production of a good.
  • Original VAT Rate = 42%
  • New VAT Rate = 22%
  • The VAT Rate value can be written in several equivalent ways:
  • 42% = 42/100 = 42 ÷ 100
  • Net Amount = The amount without VAT (excluding VAT)
  • Gross Amount = 0.21 (Pound, Euro) = The amount of money with VAT included (including VAT)
  • Gross Amount = Net Amount + Original VAT Amount

1. Rewrite the Gross Amount formula:

  • Formula:
  • 1) Original VAT Amount = Original VAT Rate × Net Amount
  • 2) Gross Amount = Net Amount + Original VAT Amount
  • ...
  • Substitute for the Original VAT Amount in the Gross Amount formula:
  • Gross Amount = Net Amount + Original VAT Rate × Net Amount
  • ...
  • Please see that the Net Amount is a common factor:
  • Gross Amount = Net Amount + Original VAT Rate × Net Amount
  • Gross Amount = Net Amount × (1 + Original VAT Rate)

  • Formula:
  • Gross Amount = Net Amount × (1 + Original VAT Rate)
  • Write the Net Amount based on the Gross Amount:
  • Net Amount = Gross Amount ÷ (1 + Original VAT Rate)

Calculation:

Net Amount =


0.21 ÷ (1 + 42%) =


0


3. Calculate the VAT Amount due to the Original VAT Rate:

  • Formula:
  • Original VAT Amount = Gross Amount - Net Amount
  • The VAT Amount, charged by the operators, is transferred to the state budget.

Calculation:

Original VAT Amount =


0.21 - 0 =


0.21


4. Calculate the VAT Amount due to the New VAT Rate:

  • Formula:
  • New VAT Amount = New VAT Rate × Net Amount
  • The VAT Amount, charged by the operators, is transferred to the state budget.

Calculation:

New VAT Amount =


22% × 0 =


22/100 × 0 =


22 ÷ 100 × 0 =


22 × 0 ÷ 100 =


0 ÷ 100 =


0

5. Calculate the New Gross Amount.

  • Formula:
  • New Gross Amount = Net Amount + New VAT Amount

Calculation:

New Gross Amount =


0 + 0 =


0

Net Amount = 0
Original VAT Amount (42%) = 0.21
New VAT Amount (22%) = 0
New Gross Amount = 0 (- 0.21 vs. initial)

Calculate the Gross Amount (With Tax Included) With Different, New, VAT Rates

Step 1: Calculate the Net Amount (Without Tax)

Step 2: Add the New Tax Amount to the Net Amount

Examples of calculations: