VAT is added on top of a price, so taking it back out is a division, not a multiplication. A receipt for ₱1,120 contains ₱120 of VAT — because ₱1,000 plus 12% is ₱1,120. Multiplying ₱1,120 by 12% gives ₱134.40, which is not the VAT on anything.
The three figures always reconcile here: the VAT is derived by subtracting the net from the gross rather than rounded separately, so they add up to the centavo instead of leaving a stray one behind.
Divide by 1.12, do not multiply by 0.12. A ₱1,120 receipt contains ₱120 of VAT, not ₱134.40. Multiplying the VAT-inclusive total by the rate is the single most common VAT mistake, and it overstates the tax every time.
Because the rate has not always been 12%. A receipt issued before the rate changed must be worked at the rate in force on its date, or the figure is wrong. Change the date and the calculation follows.
No. Some transactions are VAT-exempt and some are zero-rated, and small businesses below the registration threshold charge percentage tax instead. This tool assumes the sale is VAT-able at the standard rate — it does not decide whether VAT applies at all.
Overstated by ₱14.40, because it charges VAT on the VAT.
This is an estimate at the standard rate. It does not decide whether a sale is VAT-able, exempt or zero-rated. Nothing you type here is sent to our servers — the calculation runs entirely in your browser.
