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VAT Help

Can someone explain VAT to me? And why is it different between countries? I'm looking at an activity in Hungary and the price on the website says 95.000,- Ft + 27% VAT. I'd be paying the 95000 Forint plus an extra 25650?

Posted by
5484 posts

Don't worry about how it's calculated. But if you are interested, read Wikipedia: https://en.wikipedia.org/wiki/Value-added_tax

VAT is typically included in the price and you will only see the VAT because it is itemized on your receipt. I don't know about Hungary, but VAT has always been inclusive.

Difference between sales tax and VAT: https://tax.thomsonreuters.com/blog/onesource/sales-and-use-tax/difference-sales-tax-vat-2/

Invoicing

Sales tax: The seller should separately state sales tax.

VAT: The seller should separately state VAT and include registration
number for a VAT invoice, however, in most VAT jurisdictions prices
are tax inclusive.

Posted by
1500 posts

It's different for the same reason the sales tax is different between my city and your city.

Posted by
10861 posts

It's the same for the same reason the sales tax is the same concept in my city and your city.

Posted by
8889 posts

Why is VAT different between countries? Why would you expect it to be the same? Taxes are always different between countries. Is income tax in your country the same as in Hungary?
There are also different VAT rates for different types of goods. Food is usually a lower rate than "non-essentials" (or zero rate).

Prices are ALWAYS quoted including all taxes, that is the law in all European countries. Doesn't matter if it is a restaurant, shop or rail fare. Quoting a price and then adding tax (or any other surcharge) when you pay would count as fraudulent advertising.
That said, you don't need to worry about how much the tax is, what you see is what you pay.

For your example, Price 95,000 FT (including 27% VAT) breaks down to:
74,803 Ft before tax, plus 20,197 Ft tax = 95,000 Ft
(20,197 is 27% of 74,803)