Quick answer
- To add VAT, multiply the net amount by 1 plus the VAT rate as a decimal.
- To remove VAT, divide the VAT-inclusive gross price by 1 plus the VAT rate as a decimal.
- The VAT amount is the difference between the gross amount and the net amount.
- Net of VAT means the price before VAT, also called the VAT-exclusive amount.
- Do not remove 23% VAT by subtracting 23% from a VAT-inclusive gross price.
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Start with the right price: net or gross
Before choosing a formula, identify what the amount already represents. A net or VAT-exclusive price does not yet contain VAT. A gross, VAT-inclusive or including VAT price already contains it. “Net of VAT” normally means the amount before VAT.
| Price wording | What you have | Calculation to use |
|---|---|---|
| €100 + VAT | Net price | Add VAT |
| €123 including VAT | Gross price | Remove VAT |
| €100 net of VAT | Net price | Add VAT if a gross total is needed |
| VAT amount included in €123 | Gross price | Find net first, then gross minus net |
How to add VAT to a net price
Convert the percentage to a decimal and add 1. At 23%, the multiplier is 1.23; at 13.5%, it is 1.135; and at 9%, it is 1.09.
Gross price = Net price × (1 + VAT rate)
| Rate | VAT on €100 net | Gross price |
|---|---|---|
| 23% | €100 × 0.23 = €23.00 | €100 × 1.23 = €123.00 |
| 13.5% | €100 × 0.135 = €13.50 | €100 × 1.135 = €113.50 |
| 9% | €100 × 0.09 = €9.00 | €100 × 1.09 = €109.00 |
If an invoice shows several supplies at different VAT rates, calculate each rate group separately. Do not apply one blended rate unless that treatment is appropriate for the transaction.
How to remove VAT and find the net-of-VAT price
Removing VAT reverses the original multiplier. Divide the VAT-inclusive gross price by 1 plus the VAT rate.
Net price = Gross price ÷ (1 + VAT rate)
VAT amount = Gross price − Net price
| Rate | Gross price | Net-of-VAT calculation | VAT portion |
|---|---|---|---|
| 23% | €123.00 | €123 ÷ 1.23 = €100.00 | €23.00 |
| 13.5% | €113.50 | €113.50 ÷ 1.135 = €100.00 | €13.50 |
| 9% | €109.00 | €109 ÷ 1.09 = €100.00 | €9.00 |
You can also calculate the VAT portion directly from a gross price using the fraction rate ÷ (100 + rate). At 23%, that is gross price × 23 ÷ 123. Finding the net first is often easier to understand and check.
Why subtracting the VAT percentage gives the wrong answer
VAT is calculated as a percentage of the net price, not as the same percentage of the larger gross price. If €100 net becomes €123 after 23% VAT, subtracting 23% from €123 gives €94.71. That does not reverse the original calculation.
| Method for €123 at 23% | Result | Correct? |
|---|---|---|
| €123 − 23% | €94.71 | No |
| €123 ÷ 1.23 | €100.00 | Yes |
| €123 × 23 ÷ 123 | €23.00 VAT portion | Yes |
Using the figures on quotes, invoices and receipts
For a normal VAT invoice, Revenue requires figures such as the VAT-exclusive unit price, the breakdown by VAT rate and the total VAT payable. The exact invoice requirements depend on the transaction, but clear net, VAT and gross figures make the arithmetic easier to verify.
- State whether a quote is VAT-inclusive or VAT-exclusive.
- Confirm the correct VAT rate for the specific goods or services before calculating.
- Keep separate net and VAT totals where more than one rate is used.
- Round monetary outputs consistently to cents and keep source records for any line-level rounding differences.
- Do not use an arithmetic calculator to decide whether a supply is zero-rated, exempt, outside scope or subject to a special scheme.
Frequently asked questions
Why do I divide by 1.23 to remove 23% VAT?
Because the gross price is already 123% of the net price: 100% net plus 23% VAT.
Is removing VAT the same as subtracting 23%?
No. Subtracting 23% from a gross price gives the wrong result because the 23% VAT is calculated on the smaller net amount.
Can I use the same method for 13.5% or 9%?
Yes. Change the divisor to 1.135 for 13.5% or 1.09 for 9%.
What does net of VAT mean?
Net of VAT means the price excluding VAT. It is the amount before VAT is added.
How do I find the VAT included in a gross price?
Divide the gross price by 1 plus the VAT rate to find the net amount, then subtract the net amount from the gross price.
What is the VAT portion of €1,000 including 23% VAT?
€1,000 divided by 1.23 is €813.01 net after cent rounding. The included VAT is therefore €186.99.
Should I round every invoice line or only the total?
Rounding treatment can affect totals when an invoice has many lines. Use consistent bookkeeping and invoice rules, and check the final figures against your accounting records.
Can this formula decide which VAT rate applies?
No. It only performs arithmetic after a rate is selected. Check Revenue’s VAT rates database for the exact goods or services.
Sources & references
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