How much is the VAT? Calculate it.
Enter the amount and the rate you apply; the net base, the VAT and the total come out straight away. It also works backwards from an inclusive price.
Enter the rate on your invoice; current rates are at GİB
Enter the amount and the VAT rate; the base and VAT appear here.
You enter the rate yourself. Check which rate applies to the product or service you sell in the current list published by Gelir İdaresi Başkanlığı, Türkiye's revenue administration.
How VAT is calculated
VAT is calculated on the tax-free value of a good or a service. That tax-free value is called the net base. You multiply the base by the rate and the result is the VAT; add the two together and you have what the customer pays.
The arithmetic itself is that simple. What gets confusing is which figure you are holding: did you discuss the price excluding VAT, or was the figure you quoted the customer inclusive?
- VAT amount = net base × rate
- Total = net base + VAT amount
- Net base = inclusive amount / (1 + rate)
Finding the net base from an inclusive price
If the price you quoted the customer includes VAT, you work backwards from it. Divide the inclusive amount by (1 + rate) and you get the net base; subtract the base from the inclusive amount and the VAT is what remains.
A common mistake is multiplying the inclusive price directly by the rate. That method overstates the VAT and the figures on the invoice will not add up. Switch between inclusive and exclusive in the calculator above and you can see the difference.
- If you discussed the price exclusive, VAT goes on top
- If you quoted inclusive, VAT comes out of it
- The same figure gives two different results depending on the direction
When the lines carry different rates
If a receipt has more than one product and their rates are not the same, you cannot multiply the total by a single rate. Each line's VAT is calculated with its own rate, and then those VAT amounts are added together.
That is why keeping the rate on the line's own record makes the job easier. You do not try to remember the rate while writing the receipt; the line arrives with the correct VAT already attached.
Which rate you will enter
We do not write a rate on this page. VAT rates, and which good falls under which rate, change from time to time. A figure buried here turns into wrong information before long, and an invoice you issue relying on it comes out wrong too.
Look up the rate you will apply for the product or service you sell in the list currently in force and enter it into the calculator yourself. Asking your accountant about a line you are unsure of is always cheaper than correcting it afterwards.
The VAT you collect and the VAT you pay stay apart
When you make a sale you collect VAT from the customer; when you buy goods or services you pay VAT to your supplier. The two are tracked separately and compared at period end.
In practice this means: the VAT you collect is not your earnings. Doing your profit calculation with VAT-exclusive amounts saves you from a surprise at the end of the month.
Frequently asked
- How do I take VAT out of an inclusive price?
- You divide the inclusive amount by (1 + rate) and the result is the net base; subtract the base from the inclusive amount and the VAT is what remains. Multiplying the inclusive price directly by the rate gives the wrong answer, because that figure already contains the VAT.
- What does the net base mean?
- The net base is the tax-free amount on which the tax is calculated. For VAT it is the value of the good or service excluding VAT. The VAT amount is the base multiplied by the rate, and the total is the base plus the VAT.
- Why do you not write the VAT rate on this page?
- Rates, and which product falls under which rate, can change. A figure written on a page becomes wrong information after a while, and an invoice issued from it comes out wrong. Taking the current rate from an official source and entering it into the calculator yourself is safer.
- Should I quote the customer a VAT-inclusive price?
- In retail the price is usually discussed inclusive; between businesses the deal is normally struck on the exclusive amount and VAT is shown separately on the invoice. Which one you do does not matter; what matters is calculating them without mixing the two.
- Can one receipt carry different VAT rates?
- It can. Each line is calculated with its own rate, and the receipt's VAT is the sum of those lines. If you multiply the total by a single rate, the result will not add up.
- Should I calculate profit on VAT-inclusive amounts?
- No, use exclusive amounts. The VAT you collect goes into your till but it is not your money; at period end it is compared with the VAT you paid and passed to the state. If you calculate profit on the inclusive figure, you will mistake money that will not stay with you for earnings.
This page is for information only and is not accountancy advice. The applicable VAT rate, exemptions and withholding vary with the legislation; base the current rate and rules on the publications of Gelir İdaresi Başkanlığı, Türkiye's revenue administration, and consult your accountant if you are unsure.
So you do not calculate VAT by hand on every receipt
In Bi'Bulut the VAT rate of every product and service sits on its own card. You pick the line while writing the sales receipt and the VAT is calculated for you; when you turn the receipt into an e-invoice the same amount goes across. If you are in a hurry entering an expense, you can also write a single amount and rate for a quick record.
See the bookkeeping program