How do you separate VAT from a VAT-inclusive selling price?
Divide the VAT-inclusive price by (1 + VAT rate) to get the amount excluding VAT, and subtract it from the price to get the VAT. Multiplying the price by the rate gives a wrong result, because the VAT-inclusive price already contains the VAT itself.
| What you have | What you want to find | Calculation |
|---|---|---|
| VAT-inclusive price | Amount excluding VAT | Price ÷ (1 + rate) |
| VAT-inclusive price | VAT included | Price − amount excluding VAT |
| Amount excluding VAT | VAT | Amount × rate |
| Amount excluding VAT | VAT-inclusive price | Amount × (1 + rate) |
Where should I put VAT when setting the price?
First determine the amount excluding VAT that should be left to you, then add VAT to find the price tag. Working backwards, that is, saying “I'll sell it for ₺1,500” and subtracting VAT afterwards, leaves you with less profit than you expect.
For example, if you want to receive ₺1,250 excluding VAT from a product, the price tag at a 20% rate is 1,250 × 1.20 = ₺1,500. The price shown to the consumer must include VAT; adding VAT in the cart surprises the customer at the last step. Always calculate profit and margin using the amount excluding VAT; you can use the profit margin calculator for that.
In the Faprika panel, you define tax rates in the Tax tab of the Configuration menu and assign separate rates to items such as shipping and payment type. A step-by-step guide is in the how to set up VAT settings tutorial. Before changing a rate in the panel, use the tool's rate comparison to see how your price tags will change.
How does VAT change in a discounted sale?
VAT is calculated on the discounted price the customer actually pays; when you discount, both the amount left to you and the VAT shrink by the same proportion.
If you give a 20% discount on a coat priced at ₺1,799, the VAT-inclusive price becomes ₺1,439. Its amount excluding VAT is 1,439.20 ÷ 1.20 = ₺1,199 and its VAT is ₺240. You can see the campaign's effect on your profit in the discount calculator.
Which VAT rates apply in Türkiye?
In Türkiye, the general VAT rates are 1%, 10% and 20%; the standard rate is 20%. Some basic food products are at 1%, while some food, textile products and services are at 10%. Which product falls under which rate is determined by the lists attached to the VAT Law.
Rates may change by Presidential decision. Before putting a new product group on sale, verify the rate with your accountant. Calculation differs for withholding transactions; this tool does not apply withholding. For invoicing details, see the article how to issue an invoice in e-commerce.
Do I pay all the VAT I collect?
Generally, no: the VAT you paid on business purchases is deducted from the VAT you collected from customers on sales, and the difference is declared. That's why separating VAT correctly on both sales and purchase invoices matters.
Which expenses' VAT can be deducted, carried-over VAT and filing dates depend on legislation and may change; clarify your own situation with your accountant. Don't treat the VAT you collect as revenue or profit; keep it separate in your cash planning.
Updated: · Calculations are for information only; consult your accountant for official transactions.