- 1). Find out the VAT tax rate and the final price of the product. The tax rate should be standard for all items bought, and most countries make their VAT rate well known. As an example, say the VAT is 12 percent and the final price of the item is $50.
- 2). Divide 100 by 100 plus VAT. You want to convert the VAT rate to decimal form so that it can be easily multiplied against the final cost of the item. The "100" represents 100 percent of the base cost of the item. The "100 plus VAT" represents 100 percent of the base cost of the item plus the tax rate. In our example, you would divide 100 by 112.
100 / 112 = .8928
Rounded up, the result is .893. This means that the base cost of the item was actually .893 or 89.3 percent of the final price. - 3). Multiply the percentage of the base cost by the final cost to get the answer. Going back to our example, you would multiply .893 by $50, the final price of the item.
.893 x 50 = 44.65.
Therefore, the price before the VAT was added was $44.65.
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