If you want to know how much VAT is in the amount, you calculate the gross amount / 1.20 = net amount * 0.20. The result is the VAT included.
How do I calculate net of VAT?
Value Added Tax Payable is normally computed as follows:
- Computing Net VAT Payable on VAT “exclusive” Sales/Receipts. Total Output Tax Due or Total Vatable Sales/Receipts x 12% ...
- Computing Net VAT Payable on VAT “inclusive” Sales/Receipts. Total Output Tax Due or Total Vatable Sales / 1.12 x 12%
What is net VAT?
When calculating the VAT on a net figure the net amount represents 100% and the VAT % is added to calculate the gross. ... By adding the net and the VAT we calculated the gross amount. This is the invoice total that the customer will pay. The gross amount now includes VAT, so it's a VAT inclusive figure.
