VAT Calculation: Net, Gross and the Difference
Value Added Tax (VAT, "KDV" in Turkish) is an indirect tax applied to nearly all sales of goods and services in Türkiye. Whether you are issuing an invoice, preparing a quote or comparing purchase prices, two concepts keep coming up: the net (VAT-exclusive) amount and the gross (VAT-inclusive) amount. This tool calculates in both directions: adding VAT to a net amount, or extracting VAT from a gross amount. The result screen shows net, VAT and gross side by side, formatted in Turkish lira.
Current VAT Rates in Türkiye
- 20% — the general rate: all goods and services not subject to a reduced rate — electronics, furniture, clothing, software and consulting. The general rate was raised from 18% to 20% in July 2023.
- 10% — the reduced rate: many food products outside the basic staples, restaurant and accommodation services.
- 1% — the lowest rate: certain staple foods such as wheat flour and bread, plus specific items listed in the legislation.
Important: rate lists change by presidential decree. If you are unsure which rate applies to a product, consult the Turkish Revenue Administration's current lists or your accountant. The custom rate field accepts any rate from 0–100%, so you can also calculate VAT for other countries or special scenarios.
How to Use It
- Enter the amount: the net or gross figure you have.
- Choose the direction: "net to gross" adds VAT; "gross to net" extracts the tax from a VAT-inclusive amount.
- Pick the rate: 1%, 10% and 20% are built in; enter a custom rate for anything else.
- Click calculate: net, VAT and gross are listed instantly.
The Maths, with Examples
Net to gross (adding VAT)
VAT = net × rate / 100. Example: a software service quoted at a net 1,000 TL carries 20% VAT = 200 TL, for an invoice total of 1,200 TL.
Gross to net (extracting VAT)
The most common mistake happens here: taking 20% of a 1,200 TL VAT-inclusive amount (240 TL) is wrong. The correct method divides the gross by (1 + rate/100): 1,200 / 1.20 = 1,000 TL net, and the difference of 200 TL is the VAT. Handy shortcut at 20%: divide the gross by 6 to get the VAT amount (1,200 / 6 = 200).
For Businesses: Output vs Input VAT
VAT is not a cost out of the business's own pocket — it is collected and passed on to the state. The VAT you collect on sales is recorded as output VAT, the VAT you pay on purchases as input VAT; at the end of the period, the difference is declared and paid. For example, if you collected 12,000 TL of VAT in a month and paid 8,000 TL of VAT on expenses, the amount due on the return is 4,000 TL. Because of this mechanism, splitting VAT correctly on invoices and receipts is not just bookkeeping discipline but a direct cash-flow matter — and the gross-to-net calculation in this tool does exactly that split.
Who Uses It, and When?
- Freelancers and agencies: to clarify the invoice total of a quote given "excluding VAT".
- E-commerce sellers: to split a VAT-inclusive selling price into net revenue and tax owed.
- Bookkeeping: to quickly verify the VAT on expense receipts.
- Consumers: anyone curious how much of a price tag is tax.
Things to Watch Out For
- State the basis in quotes: at 20%, "10,000 TL + VAT" and "10,000 TL including VAT" differ by 1,667 TL — always spell it out in contracts.
- Rounding differences: VAT calculated per line item can differ by a few kuruş from VAT calculated on the total; for official documents, your accounting software's method prevails.
- For information only: the maths is correct, but tax filings and official paperwork should be confirmed with your accountant. The amounts you enter are not stored on our servers.
VAT is a small but critical piece of any e-commerce operation. If you are planning an end-to-end online sales system — product pricing, invoicing integration and payment infrastructure — have a look at our e-commerce solutions or get in touch about your project.