The method behind the calculation
Assumptions and limits
Successive discounts do not add: 10% followed by 5% gives 14.5%. For tax-inclusive inputs, the net base is extracted using the entered rate. This is single-rate arithmetic, excluding exemptions, withholding, import taxes and legal invoice generation. Intermediate values retain precision; displayed money is rounded to two decimals.
Follow the example calculation.
For 10 units priced at 1,000 excluding VAT, the starting net amount is 10,000. A 10% discount followed by 5% leaves 8,550. At the example 20% VAT rate, VAT is 1,710, the total is 10,260 and the tax-inclusive unit price is 1,026.
Frequently asked questions
Why is 10% followed by 5% not a 15% discount?
The second 5% applies to the 90% left after the first discount. The remaining share is 0.90 × 0.95 = 0.855, giving an effective discount of 14.5%.
How is the net amount extracted from a VAT-inclusive price?
Divide the inclusive amount by 1 plus the VAT rate. For an entered rate of 20%, 1,200 / 1.20 = 1,000. Simply subtracting 20% from the inclusive amount gives a different result.
Does this output replace a legal invoice?
No. This tool performs arithmetic with a single rate that you provide. It does not apply exemptions, withholding or legal invoice issuance requirements.
Inputs are processed on this device. Example figures are not quotes or live market prices.