Add or extract VAT from amount.
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VAT Calculator Guide
VAT rates in Poland: Currently there are three main rates: 23% (standard rate on most goods and services), 8% (reduced rate on some food items, books, magazines, hotel services) and 5% (reduced rate on basic food items, children's products, e-books). There is also a VAT exemption for small businesses with annual turnover up to 200,000 PLN.
Net vs gross: Net price is the amount without VAT. Gross price is the amount including VAT (net + VAT). When extracting VAT from a gross amount, divide by 1 + VAT rate (e.g., with 23%: gross amount / 1.23). When adding VAT to a net amount, multiply by the VAT rate (e.g., net × 1.23).
VAT deduction: Businesses can deduct input VAT (from purchase invoices) from output VAT (from sales invoices). This requires properly issued invoices with the seller's NIP (tax identification number). Input VAT can be deducted in the VAT-7 return for the period when the invoice was received (or within 3 months). Not all expenses are deductible - e.g., passenger cars (with exceptions), luxury goods, alcohol.
What to watch for: Always check that invoices contain all required elements: seller and buyer details, NIP, issue date, goods/services name, quantity, unit price, VAT rate and amount, gross amount. Remember to file VAT returns on time - delays can result in financial penalties.
Adding and removing VAT correctly
Adding VAT and removing it are not the same operation reversed. Taking 23% off a gross price does not give you the net price, and that single mistake is the most common error on hand-written invoices.
How it works
- Adds VAT by multiplying the net amount by (1 + rate).
- Removes VAT by dividing the gross amount by (1 + rate) — not by subtracting the rate.
- Shows the tax amount separately, which is what an invoice must state.
net → gross: gross = net × (1 + rate) gross → net: net = gross ÷ (1 + rate) VAT amount: gross − net Polish rates: 23% standard, 8% and 5% reduced, 0% on some exports WRONG: gross × (1 − 0.23) RIGHT: gross ÷ 1.23
Worked example
A gross invoice total of 1,230 at the Polish standard rate, worked both ways.
- gross → net: 1230 ÷ 1.23 = 1000
- VAT = 1230 − 1000 = 230
- check: 1000 × 1.23 = 1230 ✓
- the common error: 1230 × 0.77 = 947.10, which is 52.90 too low
Net 1,000 and VAT 230. Subtracting 23% instead of dividing understates the net by 52.90 — an error of over 5% that compounds across every line of an invoice.
Reading the result
- The reduced rates are goods-specific, not business-specific. Most food is 5%, books and some services 8%, most everything else 23%. Applying one rate across a mixed invoice is a common audit finding.
- Round the VAT on the invoice total, not on each line, unless your accounting software is configured otherwise. Line-by-line rounding produces totals that differ by a few grosze from the customer's own calculation.
- This tool encodes Polish VAT. Rates and reduced-rate categories differ in every EU country, and cross-border B2B sales frequently reverse-charge, meaning no VAT is added at all.
- For a business registered for VAT, the tax on purchases is generally recoverable, so the net figure is your real cost. For a consumer or an unregistered business, the gross figure is.
Common questions
- Why can't I just subtract 23% from the gross price?
- Because the 23% was calculated on the net, not the gross. Removing it means dividing by 1.23, which is equivalent to subtracting about 18.7% of the gross. Subtracting 23% removes too much.
- What is the VAT fraction shortcut?
- For 23%, the VAT within a gross amount is 23/123 of it — so 1230 × 23/123 = 230 directly. The equivalent fractions are 8/108 for the 8% rate and 5/105 for 5%.