VAT Calculator in the KSA

What Is a VAT Calculator?

A VAT Calculator is a tool designed to calculate tax on invoices and receipts. It allows any business or individual to enter an amount, adjust the tax rate when needed, then either add VAT to a net amount or remove VAT from a gross amount.

The calculator instantly displays the net amount, tax amount, and total amount, making VAT calculation fast and accurate. You can also adjust the default rate to match any local tax change or different foreign VAT rate.

How Does Daftra’s VAT Calculator Work?

Daftra’s Tax Calculator automates VAT calculations, saving you time and reducing manual errors. All you need to do is enter the amount, choose the calculation type you need — adding VAT or removing VAT — select the VAT rate, then click Calculate to get the tax amount, the net amount before VAT, or the total amount after VAT.

Please note that the default VAT rate in Daftra’s VAT Calculator is usually set to the rate applied in Saudi Arabia, and you can change it whenever needed. The calculator automatically applies VAT based on the selected rate, helping you calculate tax according to local requirements without manual calculations.

Calculating the Total Amount Including VAT (VAT-Exclusive Price)

Calculating VAT on a tax-exclusive price is one of the most common cases for businesses, especially B2B companies. This often applies to manufacturers, producers, and suppliers that deal with products before they reach the final consumer.

In this case, the company usually supplies products at their base price before VAT, and VAT is calculated separately according to the rate applied to the product or service.

VAT = Tax Rate × Product Cost

VAT-Inclusive Product Price = Base Product Price + VAT

Example

Assume the value of a product supplied to a company is 1,000 SAR.

The invoice lists the product description and its base value, then calculates the total invoice amount based on that value.

After that, VAT is calculated separately according to the applicable tax rate.

If the VAT rate is 15%, the VAT is calculated on the 1,000 SAR product value:

1,000 SAR × 15% = 150 SAR

So, the total invoice amount will be:

1,000 SAR product or service value + 150 SAR VAT = 1,150 SAR

How to Calculate VAT from the Total Invoice Amount (VAT-Inclusive Price)

This case is more common for retailers who sell products or services directly to consumers, where the displayed price usually already includes VAT.

For example, if a product is sold for 1,000 SAR, this means the 1,000 SAR amount is actually made up of:

Base Product Price + VAT Amount

This becomes more complex when you need to show the VAT amount separately on the invoice, because VAT must be extracted using a reverse calculation.

VAT = VAT-Inclusive Product Price − Original Product Price Before VAT

Example

First, let’s clarify the correct equation for calculating the base value of a VAT-inclusive invoice:

Base Product Value + VAT Amount = 1,000 SAR

VAT is calculated based on the base product value:

VAT Amount = Base Product Value × VAT Rate

Assuming the VAT rate is 15%, the VAT amount will be:

Base Product Value × 15%

Now we substitute VAT in the original equation:

Base Product Value + (Base Product Value × 15%) = 1,000 SAR

Solving the equation gives us the base product value:

Base Product Value = 869.57 SAR approximately

Now we calculate the VAT amount based on that base value:

VAT = 869.57 × 15% = 130.43 SAR approximately

So, when we add the base value of 869.57 SAR to the VAT amount of 130.43 SAR, the total becomes 1,000 SAR, which is the VAT-inclusive price used at the beginning of the example.

VAT Rates by Country

Please note that VAT has not been applied to goods and services in Qatar and Kuwait.

When Should You Use a VAT Calculator?

The calculator gives you a fast and accurate way to calculate VAT without formulas or manual calculations. VAT Calculator use cases include:

• When individuals or businesses need to add VAT to a net amount to know the total amount due.
• When they need to remove VAT from a gross amount to identify the net value before tax.
• When they need to easily adjust the tax rate if it changes from the default rate or when dealing with different rates in other countries.
• When preparing invoices and receipts in line with the applicable tax system.

Practical Example of VAT Calculation

The way VAT is calculated depends on whether the invoice shows VAT separately or whether the displayed price already includes VAT. Here are both methods:

1. When VAT Is Added Separately (VAT-Exclusive Price)

If the invoice includes only the base price before VAT, the calculation is as follows:

Calculate VAT:

VAT = Base Price × (VAT Rate ÷ 100)

Calculate the Final Price:

Final Price = Base Price + VAT

Example

If the base price is 1,000 USD and the VAT rate is 15%:

VAT = 1,000 × 0.15 = 150 USD

Final Price = 1,000 + 150 = 1,150 USD

2. When VAT Is Included in the Price (VAT-Inclusive Price)

If the displayed invoice price already includes VAT and you need to extract the VAT amount and base price:

Calculate the Base Price:

Base Price = Final Price ÷ (1 + VAT Rate ÷ 100)

Calculate the VAT Amount:

VAT = Final Price − Base Price

Example

If the total price is 1,150 USD and the VAT rate is 15%:

Base Price = 1,150 ÷ 1.15 = 1,000 USD

VAT = 1,150 − 1,000 = 150 USD

Frequently Asked Questions

How is VAT calculated in Saudi Arabia?

Starting from July 2020, VAT was increased from 5% to 15% on all taxable goods and services. VAT in Saudi Arabia is therefore calculated at 15% on taxable goods and services.

How do you calculate 15% VAT from the total amount?

To calculate 15% VAT from an amount, multiply the amount by 0.15.

For example, if the amount is 1,000 SAR:

VAT = 1,000 × 0.15 = 150 SAR

How much is 15% VAT on 1,000 SAR?

VAT on 1,000 SAR at a rate of 15% is:

1,000 × 0.15 = 150 SAR

What is the VAT rate?

The VAT rate is the percentage added to the base price of a good or service and paid to the government. In Saudi Arabia, the VAT rate is 15%.

When is VAT calculated for a business?

VAT is calculated for a business when it sells taxable goods or services, or when it provides goods or services within the supply chain, from production through to final sale.

How do I calculate VAT using a calculator?

When using the calculator, enter the amount, select the VAT rate, then choose whether you want to add VAT to the price or extract VAT from a tax-inclusive price. The calculator will automatically calculate the VAT amount and the net or gross amount based on your selection.

How much is the VAT on 300 SAR?

The VAT rate applied in Saudi Arabia is 15%, so the VAT on 300 SAR is:

300 × 0.15 = 45 SAR

How do I calculate the amount before VAT?

To calculate the amount before VAT when the price includes tax:

Base Price = Final Price ÷ (1 + VAT Rate ÷ 100)

Understanding how to calculate VAT on invoices is essential for meeting tax obligations and managing your business in an organized and professional way.

With Daftra’s Tax Calculator, you can calculate VAT easily, whether VAT is shown separately or already included in the total price.