How to calculate prices excluding VAT and including VAT: formulas, French VAT rates 2026 and practical examples

Updated April 2026 — Knowing how to calculate prices excluding and including VAT accurately is essential for any business owner, CFO, or accountant dealing with French invoices. A wrong VAT rate or an inverted calculation immediately distorts quotes, invoices, and VAT returns. This practical guide covers all the formulas, France's four VAT rates for 2026, and concrete sector examples.

Also read VAT return in France, Subcontracting invoicing and Tax and social security questions.

The relationship between the pre-tax price (HT — hors taxes), the VAT amount, and the all-inclusive price (TTC — toutes taxes comprises) is governed by Article 266 of the French Tax Code (CGI). Three formulas cover every situation:

Formula 1 — From pre-tax to all-inclusive

TTC = HT × (1 + VAT rate)

Example: a service invoiced at €1,000 excl. VAT at 20% → TTC = 1,000 × 1.20 = €1,200

Formula 2 — From all-inclusive to pre-tax

HT = TTC ÷ (1 + VAT rate)

Example: a price displayed at €240 incl. VAT at 20% → HT = 240 ÷ 1.20 = €200

Formula 3 — VAT amount

VAT = TTC − HT, or VAT = HT × rate

Example: HT €500, rate 10% → VAT = 500 × 0.10 = €50 → TTC = €550

The most common mistake: the reverse calculation

A frequent error is to start from a VAT-inclusive price and directly apply the percentage to find the pre-tax price, instead of dividing. On a TTC of €120 at 20%:

• ▸Error: 120 × 0.20 = 24 → assumed HT = €96 (wrong)
• ▸Correct: 120 ÷ 1.20 = €100 HT; VAT = €20

France applies four VAT rates defined under Articles 278 to 281 of the CGI and confirmed by current BOFiP guidance:

Important: these rates apply in mainland France. Specific rates apply in Corsica and in the overseas departments (DOM/ROM). French Guiana and Mayotte have VAT exemption regimes.

Restaurants (mixed rates)

A restaurant invoices a meal at €36 TTC. Food and non-alcoholic drinks are at 10%; alcoholic beverages at 20%.

• ▸Food portion: €30 TTC → HT = 30 ÷ 1.10 = €27.27; VAT = €2.73
• ▸Alcoholic drinks: €6 TTC → HT = 6 ÷ 1.20 = €5.00; VAT = €1.00
• ▸Total HT = €32.27; VAT collected = €3.73

Construction — renovation works on a primary residence

A contractor performs insulation works for €5,000 HT. The dwelling is more than two years old and used as a primary residence. The applicable rate is 5.5% (energy efficiency, CGI art. 278-0 bis A).

• ▸TTC = 5,000 × 1.055 = €5,275

Note: if the same works were performed on a commercial property or a new dwelling (less than two years old), the rate would be 20%.

Bookshop — digital book

A publisher sells an ebook at €9.90 TTC at the rate of 5.5% (art. 278-0 bis, aligned with print books since 2012).

• ▸HT = 9.90 ÷ 1.055 = €9.38
• ▸VAT = 9.90 − 9.38 = €0.52

Accounting firm

Professional fees: €2,400 HT × standard rate 20% = VAT €480 → TTC = €2,880.

A VAT-registered client recovers the €480 through their VAT return. A non-VAT-registered client (association, individual) bears the full TTC amount as a final cost.

VAT exemption threshold (auto-entrepreneurs and small businesses)

Businesses whose turnover does not exceed the franchise thresholds (art. 293 B CGI) — in 2026: €37,500 for services, €85,000 for goods — do not charge VAT. The mandatory wording on the invoice is: "TVA non applicable, art. 293 B du CGI". The price invoiced is a net price without VAT.

VAT reverse charge

In certain situations (construction subcontracting, intra-EU purchases, some cross-border services), VAT is not collected by the supplier but reverse-charged by the customer. The invoice states the pre-tax amount and the note "Autoliquidation". The customer declares VAT as both output tax and input tax.

Margin scheme

Resellers of second-hand goods, travel agencies, and certain operators calculate VAT not on the full price but on the margin between the resale price and the acquisition price. The formula becomes: VAT = (Sale price TTC − Purchase price TTC) × rate ÷ (1 + rate).

A compliant invoice under Articles 289 and 242 nonies A of Annex II to the CGI must state:

• ▸the applicable VAT rate for each line item
• ▸the pre-tax amount by rate, then the total pre-tax amount
• ▸the VAT amount for each rate
• ▸the total all-inclusive amount

Where multiple rates apply on the same invoice (e.g. restaurant), each line must identify the relevant rate. A single global "VAT included" price without breakdown is non-compliant and may result in a denial of input VAT deduction for the VAT-registered client.

Hayot Expertise insight: identifying the right VAT rate is not always intuitive. We regularly work with clients who default to the 20% rate on renovation works that qualify for 5.5% or 10%. On a €50,000 project, the difference is €7,250 in additional VAT for the client. Verifying the applicable rate before issuing the quote is a sound practice.

Calculating prices excluding and including VAT in 2026 relies on a simple formula — but the real challenge is identifying the correct VAT rate based on the nature of the service and the applicable regulatory framework. Systematically applying 20% exposes businesses to invoicing errors and potential corrections during tax audits. Mastering the four rates (20%, 10%, 5.5%, 2.1%) and the special cases (exemption threshold, reverse charge, margin scheme) is essential for sound quoting and compliant VAT declarations.

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(Official sources: CGI art. 278 to 281, BOFiP — VAT rates and taxable base, Entreprendre.Service-Public.fr, impots.gouv.fr)

What is the formula to convert a price from excluding VAT to including VAT?

The formula is: TTC = HT × (1 + VAT rate). For a 20% rate, multiply the pre-tax price by 1.20. To convert from TTC to HT: HT = TTC ÷ (1 + rate). Example: €120 TTC at 20% → HT = 120 ÷ 1.20 = €100. Never subtract the percentage directly from the TTC figure — that is a common and costly mistake.

What are the French VAT rates in 2026?

France applies four rates: 20% (standard rate, most services and goods), 10% (restaurants, dwelling renovation, passenger transport), 5.5% (food, books, energy efficiency works) and 2.1% (reimbursable medicines, registered online press). These rates are defined under Articles 278 to 281 of the French Tax Code (CGI).

How do you calculate the VAT amount from a VAT-inclusive price?

First find the pre-tax price: HT = TTC ÷ (1 + rate). Then subtract: VAT = TTC − HT. Example: TTC €550 at 10% → HT = 550 ÷ 1.10 = €500 → VAT = €550 − €500 = €50. Equivalently: VAT = HT × rate = 500 × 0.10 = €50.

Does a French auto-entrepreneur charge VAT on invoices?

No, as long as they benefit from the VAT exemption threshold (art. 293 B CGI). In 2026, the thresholds are €37,500 revenue for services and €85,000 for goods. The invoice must state: "TVA non applicable, art. 293 B du CGI". Once the threshold is exceeded, VAT registration becomes mandatory and invoices must include VAT.