Throughout this article we will be talking about how to get VAT in Excel, so I invite you to join me and learn how to do it with this valuable information.
Learn how to get VAT in Excel.
How to get VAT in Excel?
This Microsoft Office software is used today all over the world to carry out various activities. Particularly all those associated with databases and numerical calculations. Because this program includes a wide range of functions and formulas that will give you the ability to perform all these tasks.
Excel has become the right hand man for many businesses, financial organizations, and educational institutions due to its superb calculation efficiency. Therefore, activities or projects that involve the calculation of VAT applied to a wide variety of products must often be carried out.
Therefore, this Microsoft application provides you with the essential tools to start calculating the taxes imposed by each of the nations of the world for various percentages of articles and services. So, next we are going to show you how to get VAT in Excel. In this regard, carefully follow the following instructions:
What is VAT and how does it affect your Excel accounts?
In Latin America, VAT or value added tax as it is known, or value added tax if we refer to Spain, is an indirect tax that must be obligatorily applied to the consumption of services, transactions, products and imports. Therefore, it is considered an indirect tax based on consumption.
The rate of this tax may vary in different countries, however, the procedure to calculate it in Excel will always be the same. That is to say, it supposes a percentage of increase in the total price of each one of the products or services that are acquired. Consequently, when you buy something in a store, you pay the value of the item plus the percentage of VAT added to the price.
It is important to note that the person who sells the product or provides the service does not keep the percentage added to the final price since they must pay the Treasury every three months the difference between the tax collected by the invoices sent to their clients and the tax accrued. for the invoices of the expenses necessary for the development of its activity (known as deductible expenses).
This tax must be notified to the government. Consequently, each person who declares VAT must maintain a balance between all the invoices he receives and those he issues, all of them as deductible expenses.
Summarizing
What this means is that VAT is an indirect tax that is applied to the costs of production and sale of a company and does not influence the final income of the same at any time. The income obtained from this tax serves to provide resources to the State. There are three types of VAT depending on the percentage applied to the sale price.
When a person becomes independent or professional and undertakes a commercial project, they will have to issue invoices and, consequently, they will have to apply VAT on their services.
Even so, many times, when trying to calculate the VAT of a certain good or service, the method is not entirely clear. Excel has become one of the most effective tools to perform calculations quickly and easily. That is why we are going to guide you through the essential processes so that you can calculate it with this Microsoft application.
Learn how get VAT in Excel
It is essential to be able to calculate this tax in Excel, especially if you work in a corporation or company where you control the budget, or if it has been assigned to you as a university project.
It is crucial to note that VAT is a tax that all customers must pay at the time of each authorized business transaction. Additionally, it should be noted that the value of this tax varies in each country, with the majority having a different value than the rest. Therefore, you must follow the following steps to perform the calculation from Microsoft Excel:
Calculate VAT for a single value
- The first step is to insert the price of the product or service in one of the cells of the spreadsheet.
- Then, in another cell, enter the VAT value as a percentage.
- As a next step, you must multiply the values of the cells to determine the amount of VAT, so you have to enter the formula = B1 * B2 in the functions area. Keep in mind that these values depend on the cells you are using.
- To calculate the total amount of the product price, add the product price and the VAT amount, in this case using the formula: = B1 + B3.
- With this method, the tax on the value of a single product can be determined very simply and easily.
Next, we will do the calculation for various products:
Calculating the tax for a list of products
Another method to calculate VAT in Excel, and possibly one of the most typical when using the program, is to do it for a list of products and for which the VAT calculation of each one is required. In accordance with this, we will show you how to carry it out, going through each of the steps indicated below:
- To proceed with this method you need a list of products or services, as presented on the screen. You will see then, that this list consists of 15 items, and each of which has an assigned price.
- Product names appear in the first column, followed by their prices in the second. Then you must add the formula to calculate the VAT of each of them in the third column, meanwhile, the total amount must be calculated in the fourth column. Finally, in column F2, it can be seen that the "VAT Rate" is 16% in this example.
Other steps
- This percentage figure will be used in each of the calculations to be done. Here the formula to calculate the value of VAT is: =B2 * $ F $ 2.
- As the goal is for this value in the formula to remain fixed when copying the formula down, the $ symbol has been used to refer to cell F2. After applying the function, you will get the following result.
- After getting the first result in the column, copy the formula down to get the VAT calculation for all other items in the list. For that, you must click on the lower corner of the cell and drag it to the last product in the row.
- Finally, it calculates the total price, taking into account that the total price is equal to the value of the product plus the tax percentage. Consequently, in this scenario, you must use the formula = B2 + C2, and after obtaining the first result, you must slide the cell down to get the remaining values.
The formulas in the program use absolute references. This means that if you change the VAT value in cell F2, the system will automatically change all the values to reflect the new percentage. You want to know how to insert images in Excel? Click on the pinned link!
Calculate the total amount without calculating VAT
In the previous procedures, the total amount was determined after calculating the VAT. Here we will show you a formula that will allow you to calculate the total value without adding the VAT cell, which will allow you to obtain the result in a much easier way.
This formula is based on the fact that when a value is multiplied by a percentage above 100%, the larger percentage is added to the original value. For example, if the VAT value is 10%, the amount should be 110%.
We have the case where you have to multiply a value by 116%, then, as explained in the previous paragraph, we must know that the value of the VAT percentage to increase is 16%. Since the value of the VAT percentage is in cell E2, you must use the following formula to calculate the total amount of each of the products in the list: = B2 * (1 + $ E $ 2).
Since the percentages are decimal values, and 100% equals one, the price of the product must be multiplied by one plus the percentage indicated in cell E2. After applying the formula, you will get the result shown in the image.
The $ sign has been used again, but in this case to refer to cell E2, which allows it to be kept fixed when applied to the rest of the cells in the list, as in the previous case. After scrolling down, you will see the following results.
This allows you to start getting the total price of each item in a much easier way. The results of this table can be contrasted with those of the previous procedure and verify that the final amount of all the articles is the same.
How to subtract VAT in Excel?
I will teach you how to deduct VAT from the total price of a product to get the price of the merchandise minus the tax. You have the total price of all the products in cell F1 and the VAT value in cell F2. We can use the following formula to calculate the price of the product without VAT = B2 / (1 + $ F $ 2).
Since dividing a number by a percentage greater than 100% we will be subtracting the percentage that is greater than 100%, this calculation follows the reverse reasoning of the previous example. As a result, dividing a value by 116% will result in a 16 percent reduction in that value.
The above formula divides the total quantity of the product in cell B2 by 1 plus the percentage specified in cell F2. The $ sign has been added to this reference to ensure that it remains fixed when copying the formula down.
Once the value of the item is obtained without the tax, the VAT can be determined using the following formula: = C2 * $ F $ 2. In this way, the VAT amount and value of an item was obtained from the total price and the rate used in the calculation.
What to consider before knowing how to get VAT in Excel?
When how to get VAT in Excel of a product or service, various factors must be taken into account, one of which is the VAT percentage that must be added to the cost of each product. On the other hand, when performing this mathematical action in Excel, you have to remember which formulas to use as well as where each of the data is located in the Excel cells.
You have to bear in mind that the value of the tax must simply be added to the real value of the product; For example, if the item costs 100 euros and the tax is 10 euros, the final price of the article will be 110 euros. As has already been said, the seller does not keep the difference, but must communicate it to the government federations responsible for this tax.
VAT in the main Spanish-speaking countries What is the percentage in each one?
As has already been said in this article, each country has its own VAT value, which changes according to the governmental laws of each one. However, and even when each country applies different values, it is essential to bear in mind that the calculation to estimate the value of the same on any product or service is carried out in the same way in all circumstances.
This value must be assumed by everyone, since every time you make a purchase in a legal establishment that bills, this value will already be included in the amount of each of their products. Consequently, you will end up paying a higher price for the product. By virtue of the above, I will give you the value of the tax in the main Spanish-speaking countries:
- Uruguay VAT (VAT)% = 22 Reduced VAT% = 10
- Argentina VAT (VAT)% = 21 Reduced VAT% = 10.5
- Spain VAT (VAT)% = 21 Reduced VAT% = 10 Reduced VAT 2% = 4
- Chile VAT (VAT)% = 19
- Brazil VAT (VAT)% = 17-19 Reduced VAT% = 12 Reduced VAT 2% = 7
- Peru VAT (VAT)% = 18
- Dominican Republic VAT (VAT)% = 18
- Mexico VAT (VAT)% = 16
- Colombia VAT (VAT)% = 16 Reduced VAT% = 10
- Honduras VAT (VAT)% = 15
- Nicaragua VAT (VAT)% = 15
- Bolivia VAT (VAT)% = 13
- El Salvador VAT (VAT)% = 13
- Ecuador VAT (VAT)% = 12
- Guatemala VAT (VAT)% = 12
- Venezuela VAT (VAT)% = 12 Reduced VAT% = 8
- Puerto Rico VAT (VAT)% = 11.5
- Paraguay VAT (VAT)% = 10 Reduced VAT% = 5
- Panama VAT (VAT)% = 7
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