Reverse VAT Calculation: Extract Net from Gross Price

What is Reverse VAT Calculation?

Reverse VAT calculation (also called VAT extraction or "scorporo" in Italian) is the process of extracting the net price and VAT amount from a gross (VAT-inclusive) price.

The Reverse VAT Formula

Net Price = Gross Price ÷ (1 + VAT Rate ÷ 100)

VAT Amount = Gross Price - Net Price

Step-by-Step Example

Let's extract VAT from a €244 gross price with 22% VAT:

1. Divide by the VAT multiplier: €244 ÷ 1.22 = €200
2. Calculate VAT amount: €244 - €200 = €44

Result:

• Gross price: €244
• Net price: €200
• VAT amount: €44

Quick Reference Table

Common Mistakes to Avoid

1. Don't simply subtract the percentage - €122 - 22% ≠ €100
2. Use the correct formula - Always divide by (1 + rate/100)
3. Check your calculation - Net + VAT should equal Gross

When Do You Need Reverse VAT?

• Analyzing competitor prices
• Expense reports and reimbursements
• Accounting and bookkeeping
• Preparing invoices from receipts
• Budget planning