A price marked “excluding VAT” is the net price: what the seller charges before Value Added Tax is added on top. The full amount you pay is higher, often by 17 to 27 percent depending on the country. Standard VAT rates across the EU run from 17 percent in Luxembourg to 27 percent in Hungary, with most member states between 19 and 25 percent.1Tax Foundation. VAT Rates in Europe, 2026 The United States has no VAT, but Americans see VAT-exclusive pricing on foreign websites, on wholesale quotes from international suppliers, and in some travel contexts.
What “Excluding VAT” Means on a Price
“Excluding VAT,” sometimes shortened to “ex VAT” or “excl. VAT,” refers to the price before the government consumption tax is layered on. The gross price is what you actually pay: the net price plus the applicable VAT. On an invoice that shows both, the difference between them is the tax.
The gap is significant. The average standard VAT rate across OECD countries is 19.4 percent.2Tax Foundation. International Tax Competitiveness Index 2025 A €500 item listed “excl. VAT” in a country with a 20 percent rate costs €600 once the tax is included.
The idea is familiar from American retail, where sticker prices are pre-tax and sales tax is added at checkout. The scale is different. Combined state and local sales tax in the U.S. averages about 7.53 percent,3Tax Foundation. State and Local Sales Tax Rates, 2026 roughly a third of what most VAT countries charge.
How to Calculate the Total from an Excl. VAT Price
Turning a net price into what you’ll actually pay takes one multiplication. First find the standard VAT rate for the country of sale. A few common ones as of 2026: the UK charges 20 percent,4GOV.UK. VAT Rates Germany 19 percent, France 20 percent, and Italy 22 percent.1Tax Foundation. VAT Rates in Europe, 2026
Then do the math:
- Convert the rate to a decimal by dividing by 100. Twenty percent becomes 0.20.
- Multiply the net price by the decimal to get the VAT amount. On a €400 item at 20 percent, that’s €400 × 0.20 = €80.
- Add the VAT to the net price. €400 + €80 = €480 total.
As a shortcut, multiply the net price by (1 + the rate). €400 × 1.20 = €480 in one step.
One caution: many countries apply reduced rates to certain goods. The UK, for example, charges 5 percent on home energy and children’s car seats, and 0 percent on most food and children’s clothing.4GOV.UK. VAT Rates Applying the standard rate to a reduced-rate item will overstate what you owe.
How to Work Out the VAT Already Included in a Price
The reverse calculation comes up when you’re reading a receipt or invoice and want to separate the seller’s price from the tax. Divide the gross price by (1 + the VAT rate as a decimal).
If you paid €600 including 20 percent VAT:
- Net price: €600 ÷ 1.20 = €500
- VAT amount: €600 − €500 = €100
A frequent mistake is multiplying the gross price by the rate directly. €600 × 0.20 gives €120, which is wrong: the 20 percent rate applies to the net price, not the gross. The correct VAT figure is €100. On large invoices, that error compounds quickly.
Why You’re Seeing a Price Without VAT
Business-to-business listings almost always show VAT-exclusive prices because the tax washes out between registered companies. When one business buys from another, it pays VAT to the supplier and then reclaims that amount from the tax authority as an input tax credit. The supplier remits what it collected, and the net effect between the two firms is zero.5Tax Policy Center. How Would a VAT Be Collected For procurement decisions and margin calculations, only the net figure matters.
Consumer-facing rules are stricter. In the EU and UK, prices displayed to consumers must include VAT.6Business Companion. Providing Price Information So when you see a price marked “excluding VAT,” it usually signals a wholesale or trade-oriented listing, a business supplier, or a site that hasn’t detected that you’re a consumer buyer.
What This Means for U.S. Shoppers and Travelers
Even without a domestic VAT, several situations put Americans in front of VAT-exclusive prices.
Buying from Foreign Websites
Many European retailers default to VAT-exclusive display. Some detect a U.S. shipping address and strip the VAT at checkout, because the tax applies where the seller is located rather than where the package ends up. Others don’t remove it, and reclaiming VAT after the fact can be difficult. Before you finalize any international order, look for a line item confirming whether VAT has been added or removed from your total.
Traveling in a VAT Country
Purchases you make in person include VAT in the sticker price, because consumer prices have to be VAT-inclusive. You won’t see the tax unless you check the receipt. As a non-resident, you can often reclaim VAT on goods you take home. Minimum purchase thresholds vary by country. Germany requires purchases over €50, and France requires over €100, with goods generally exported within three months.7Federal Foreign Office. German VAT Refund
Reading a Supplier Invoice
Formal invoices in VAT countries have to break out the tax. EU rules require the net unit price, the applicable VAT rate, and the VAT amount in currency to appear as separate line items, with the gross total as the final amount due.8Taxation and Customs Union. Rules on VAT Invoicing in the EU If you’re a U.S. company paying an EU supplier, keep those invoices. They’re the documentation you’ll need if you later pursue a refund through the supplier’s country.
Getting VAT Back When You Travel
Reclaiming VAT on goods you carry home can recover roughly one-sixth of the price you paid in a country charging 20 percent. The process follows a general pattern:
- At the store, tell the retailer you plan to export the goods and ask for a tax refund form (sometimes called export papers or a Tax Free Shopping check) along with the original receipt.
- Keep the items unused, in their original packaging with tags attached.
- At the airport before departure, present the goods, paperwork, receipts, and your passport to the customs desk. An officer inspects the items and stamps the export paperwork. Pack refund-eligible goods in your carry-on so they stay accessible.
- Submit the stamped paperwork to the retailer or a refund service. Some airports pay cash on the spot; otherwise the refund arrives by credit card or bank transfer weeks later.
Third-party services like Global Blue and Planet handle the paperwork but deduct a processing fee, so you receive less than the full VAT. Mailing stamped export papers directly to the retailer avoids the middleman fee but takes longer.7Federal Foreign Office. German VAT Refund
One boundary worth knowing: the UK eliminated its tourist VAT refund scheme, so purchases made in Britain are not eligible for a refund, regardless of amount.