How do I add VAT to a price?

You add VAT by multiplying the net price by one plus the VAT rate. A €100 net price with 23% VAT becomes €100 x 1.23 = €123 gross. The VAT amount on its own is simply the net price multiplied by the rate, so on that same €100 it comes to €23.

How do I take VAT off a price?

You remove VAT by dividing the gross price by one plus the VAT rate. A €123 price that includes 23% VAT works out to €123 / 1.23 = €100 net. Simply subtracting 23% from €123 instead gives €94.71, which is wrong, because the VAT was calculated on the smaller net figure, not on the gross price you're starting from.

Adding and removing VAT: the calculation and the common mistake

Adding VAT means multiplying by one plus the rate: at 23%, €100 becomes €123. Removing VAT means dividing by that same number, not subtracting the rate: €123 divided by 1.23 gets you back to €100. That second operation is the one half the internet gets wrong, because subtracting 23% from €123 feels like the natural reverse of adding 23% to €100 — and it isn’t. The two operations aren’t mirror images, and treating them as if they were is the single most common VAT error there is.

Adding

Adding VAT scales the net price up by the rate. Take the net amount and multiply by one plus the rate, expressed as a decimal.

Net €100 at 23% (standard rate): €100 × 1.23 = €123
Net €100 at 13.5% (reduced rate): €100 × 1.135 = €113.50

The VAT itself is the difference between gross and net: €23 in the first case, €13.50 in the second. Straightforward, because you’re building up from a known starting point.

Removing

Removing VAT means going the other way: you have the gross price and want the net. Divide by one plus the rate — the same number you multiplied by.

Gross €123 at 23%: €123 ÷ 1.23 = €100 net, with €23 of VAT inside it
Gross €500 at 23%: €500 ÷ 1.23 = €406.50 net, €93.50 VAT
Gross €500 at 13.5%: €500 ÷ 1.135 = €440.53 net, €59.47 VAT

Why division and not subtraction? Because the 23% was never a percentage of the gross price. It was charged as 23% of the net. When the seller built the price, they took the net figure and multiplied it by 1.23; the VAT is 23% of that original net, and it is now sitting inside the total as a fixed amount. The gross figure has that 23% baked in, so the rate no longer describes the gross correctly. Dividing by 1.23 undoes the exact multiplication that created the gross figure, which is why it lands you back on the net every time, whatever the starting price.

The wrong way, shown

The instinctive move is to take the gross price and subtract 23% from it, as though removing VAT were the reverse of adding a normal 23% markup.

Take €123 gross, knock 23% straight off it, and you land on €94.71 — not the correct net of €100. The removal has overshot.

The reason is that 23% of €123 is a bigger sum than the 23% of €100 that was actually charged. The gross figure is already inflated by the VAT, so taking the rate off the gross removes more than was ever added. Subtracting a percentage from a gross price always over-removes, and the gap widens as the rate climbs: at higher rates the gross is inflated by more, so the over-removal is larger too. This is why the reverse operation cannot be a subtraction of the same percentage that the forward operation added.

The general rule

This is reverse percentages wearing a tax badge: any time a value has been increased by a percentage and you need to find the original, you divide by one plus that percentage, and VAT removal is just the tax-specific case of that rule.

Check yourself

Whatever net figure you land on when removing VAT, apply the rate forward again and confirm you get back to the gross you started with. €406.50 × 1.23 should return €500. If it does, the removal was correct; if it doesn’t, the arithmetic went wrong somewhere upstream.

Irish VAT rates

For Ireland, Revenue sets the following rates, effective from 1 January 2026 as of this review: standard rate 23%, reduced rate 13.5%, second reduced rate 9%, livestock rate 4.8%, and the flat-rate scheme for farmers at 4.5%. Confirm the current rate with Revenue before relying on it for a return, since rates and effective dates change.