Quote:
Originally Posted by HarryT
I see your error. You're thinking that the VAT is calculated on the "tax-inclusive" price. It isn't - although the price is always quoted including tax, VAT is always calculated on the price excluding tax, just like sales tax is.
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Actually, special taxes like petrol tax are added first.
In Sweden from a consumers point of view we say that the VAT is 20% and that is the VAT part of the price including VAT. From the sellers point of view or from a companies poit of view the VAT is 25% which is what he adds to the price without VAT. A consumer never have to add the VAT since it is always included in the price.