How VAT is calculated
Adding VAT: net amount × rate. At 20%: €100 → VAT €20 → gross €120.
Extracting from a gross amount: gross × 20⁄120 = VAT (coefficient 0.1667). At 9%: gross × 9⁄109 (0.0826). Mistake #1 in practice is subtracting 20% from the gross amount — that gives €24 instead of €20.
When 9% applies
The reduced rate under Art. 66a of the VAT Act applies to hotel and similar accommodation. Restaurant services, books and children's food have been back at 20% since 2024. The list is verified as of 3 September 2026; changes are made through the budget act — check with your accountant if unsure.
When you owe VAT
Only VAT-registered persons charge VAT. Registration is mandatory once taxable turnover exceeds €51,130 in a calendar year (from 1 January 2026) — details on the VAT registration page.
Worked examples
| Case | Calculation | Result |
|---|---|---|
| Quote €1,500 excl. VAT, VAT-registered client | 1,500 × 20% | VAT €300, invoice €1,800 |
| Receipt €59.90 incl. VAT — how much is the tax | 59.90 × 20⁄120 | VAT €9.98, net €49.92 |
| Hotel €120/night incl. 9% VAT | 120 × 9⁄109 | VAT €9.91, net €110.09 |
| Service from an EU company €400 (reverse charge) | 400 × 20% under Art. 117 protocol | VAT €80 — charged and deducted simultaneously |
Common mistakes
Subtracting 20% from the gross amount instead of dividing by 1.20 — gives €24 instead of €20 on €120. Mixing rates in one till report (a venue with both accommodation and food). Charging VAT without registration — a business below the threshold has no right to show VAT on the invoice; the correct wording is "person not registered under the VAT Act". VAT on an advance payment — due when the advance is received, not at delivery. Details: VAT registration and Taxes 2026.
Frequently asked questions
How do I extract VAT from a VAT-inclusive amount?
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Divide the gross amount by 1.20 (at 20%) or 1.09 (at 9%) to get the net amount. The difference is the VAT. The calculator does this when you choose "incl. VAT (extract)".
What is the restaurant VAT rate in 2026?
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20%. The reduced 9% for restaurant services was a temporary measure that ended in 2023. The reduced rate still applies to accommodation.
Do I need to show VAT on the invoice if I'm not registered?
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No. The invoice is VAT-exempt with the wording "Art. 113(9) of the VAT Act — unregistered person". Check whether you are approaching the €51,130 annual threshold.
Sources
VAT Act Art. 66, 66a, 96 (State Gazette No. 115/30.12.2025). Verified 3 September 2026. Bulsmetka is a private firm; results are indicative.