VAT Calculator

How does VAT computation work?

Add VAT: total = value × (1 + rate/100). Use this when you have the pre-tax value and need the invoiced price.

Remove VAT: net = total / (1 + rate/100). Here you go the other way around, starting from the final price to recover the pre-tax value.

Nothing leaves your browser; the math runs locally.

VAT: how it works and what changes in Brazil

VAT (Value-Added Tax, in Portuguese Imposto sobre Valor Agregado, IVA) is a non-cumulative consumption tax charged at every stage of the supply chain, with each link crediting the tax paid by the previous one — so the economic burden falls only on the final consumer. The two basic formulas are tax = base · rate and price with VAT = price · (1 + rate). Typical European rates: Portugal 23%, Spain 21%, France 20%, Germany 19%. A €100 product at 23% becomes €123, with €23 of tax going to the treasury.

An important distinction is VAT "by the outside" vs. "by the inside". The international standard is "by the outside": the rate is applied on top of the net price (the rate is what you actually pay extra). Brazilian indirect taxes (ICMS, PIS, COFINS) work "by the inside" — the tax is part of its own base, so a nominal 18% ICMS produces an effective rate of 18% / (1 − 18%) ≈ 21.95%. This makes price comparisons across countries non-trivial.

Brazilian context: IBS and CBS (LC 214/2025)

Brazil approved a constitutional tax reform via EC 132/2023, regulated by LC 214/2025, replacing ICMS, ISS, PIS and COFINS with a dual VAT: CBS (federal Contribuição sobre Bens e Serviços) and IBS (state-and-municipal Imposto sobre Bens e Serviços). Transition runs from 2026 to 2032, with the combined rate estimated at 26–27%. The reform brings Brazil closer to the global VAT standard: non-cumulative crediting, taxation at destination, and a charge that is computed "by the outside" rather than embedded in the base.

FAQ

What is the difference between VAT and sales tax? VAT is charged at every stage with credit for prior stages; the US sales tax is charged only at the final sale, with no credit mechanism. VAT collects revenue earlier and is harder to evade.

Is Brazil already using IBS/CBS? No — the law was approved in 2025 but the rollout starts in 2026 with a test rate, ramping up through 2032. ICMS, ISS, PIS and COFINS continue to apply during the transition window.

Can companies recover VAT paid on inputs? Yes, that is the core of the non-cumulative regime. A company offsets the VAT charged on its sales against the VAT paid on its purchases, and pays the difference. End consumers cannot recover the VAT.