What Is a VAT-Exclusive Price?
Definition
VAT-Exclusive Price: The price before value added tax (VAT) is added. VAT is calculated on this amount: VAT = VAT-exclusive price × rate.
A VAT-exclusive price is the amount before value added tax is added. It appears on business quotes and invoices, which often omit VAT. VAT is calculated on this amount: multiply it by the rate, then add the result to get the VAT-inclusive price. A legal cap on a fee may also apply to the amount without VAT.
Where it appears in the formulas
VAT = VAT-exclusive price × rate and VAT-inclusive price = VAT-exclusive price + VAT. The VAT calculator adds the VAT; the real estate commission calculator adds it to a commission set without VAT.
In Türkiye
VAT is KDV in Türkiye, and the general rate is 20%. 20% VAT on 3,000 TRY is 600 TRY, so the inclusive price is 3,600 TRY. The legal cap on estate agent commission applies to the amount without VAT: on a 4,000,000 TRY sale, the real estate commission calculator adds 32,000 TRY VAT to a commission of 160,000 TRY without VAT.