The determination of a price inclusive of all taxes from a price exclusive of taxes, specifically value-added tax (VAT), is a fundamental operation in financial transactions and accounting. For example, a product listed at 100 before VAT, when subjected to a 20% VAT rate, results in a final price of 120.
This calculation is essential for businesses to accurately reflect revenue and expenses. It ensures compliance with tax regulations and allows consumers to understand the total cost of goods and services. Historically, systems for managing these calculations have evolved alongside the implementation and modification of VAT laws globally.
