EU VAT Calculator: Forward, Reverse, and B2B Explained

Value Added Tax (VAT) is the consumption tax used throughout the European Union. It sounds simple — add a percentage to the price. But with 27 member states each setting their own rates, plus reduced rates for specific goods, cross-border B2B rules, and the reverse charge mechanism, it gets complicated fast.

VAT Rates Across the EU (2026)

Every EU country sets its own standard VAT rate, within a minimum of 15% required by EU law. Most also have reduced rates (5-9%) for essentials like food, books, and medicine, and sometimes super-reduced or zero rates.

• Standard rates range from 17% (Luxembourg) to 27% (Hungary)
• Germany: 19% standard, 7% reduced
• France: 20% standard, 5.5% reduced, 2.1% super-reduced
• Italy: 22% standard, 10% reduced, 4% super-reduced
• Ireland: 23% standard, 13.5% reduced, 9% tourism rate
• Netherlands: 21% standard, 9% reduced
• Spain: 21% standard, 10% reduced, 4% super-reduced

Forward VAT Calculation (Adding VAT)

This is the most common scenario: you have a net price (excluding VAT) and need to add VAT to get the gross price (what the customer pays).

Gross = Net × (1 + VAT rate)

Reverse VAT Calculation (Extracting VAT)

Sometimes you have the gross price (the sticker price) and need to figure out how much is VAT. This happens when you're analyzing costs or preparing your VAT return.

Net = Gross ÷ (1 + VAT rate)
VAT amount = Gross - Net

The Reverse Charge Mechanism (B2B)

Here's where VAT gets tricky. When a business in Germany sells services to a business in France, the German seller doesn't charge German VAT. Instead, the French buyer accounts for the VAT themselves — at the French rate — on their own VAT return. This is called the reverse charge.

The reverse charge exists to prevent tax fraud and simplify cross-border trade within the EU. Without it, a German company would charge 19% VAT on a sale to France, and the French buyer would have to reclaim that 19% from the German tax authority — an administrative nightmare.

With reverse charge:

1. The seller issues an invoice with no VAT charged, marked "Reverse charge — VAT to be accounted for by the recipient."
2. The buyer records the sale on their VAT return, calculating VAT at their own country's rate.
3. The buyer simultaneously claims this VAT back as input tax (since it's a business expense). Net effect on cash: zero, but it creates a paper trail for tax authorities.

When Reverse Charge Applies

• B2B services across EU borders: A consultant in Spain providing services to a company in Italy.
• B2B goods (intra-community supply): When a German company sells goods to a French company, the goods move across borders. The seller charges 0% VAT (with proof of transport and the buyer's VAT number). The buyer accounts for VAT via reverse charge.
• Non-EU suppliers: A US software company selling digital services to EU consumers must register for VAT in the EU (via OSS — One Stop Shop) and charge VAT at the customer's country rate.

OSS: One Stop Shop for Digital Sellers

If you sell digital services to consumers across the EU, you're supposed to charge VAT at the customer's country rate. Without OSS, you'd need to register for VAT in every EU country where you have customers. The OSS scheme lets you register once (in any EU country) and file a single quarterly return covering all EU sales.

The Bottom Line

1. Forward VAT: Gross = Net × (1 + rate). Reverse VAT: Net = Gross ÷ (1 + rate).
2. Each EU country sets its own standard rate (17-27%) plus reduced rates for essentials.
3. For B2B cross-border transactions, use the reverse charge mechanism — the buyer accounts for VAT, not the seller.
4. Always verify the buyer's VAT number via VIES before applying reverse charge.
5. Digital sellers to EU consumers can use OSS to avoid registering in every country.

Disclaimer: This guide is for informational purposes only and does not constitute tax advice. VAT rules are complex and country-specific. Consult a tax professional for your specific situation.