How to calculate prices excluding VAT and including VAT: formulas, French VAT rates 2026 and practical examples
All formulas to convert between prices excluding VAT and including VAT, the four French VAT rates for 2026 (20%, 10%, 5.5%, 2.1%) and sector-specific examples.
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Business law support in France | Corporate secretarialExpert note: This article was written by our chartered accountancy firm. Information is current as of 2026. For a personalised review of your situation, contact us.
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 three essential formulas: pre-VAT, VAT and all-inclusive price#
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 fréquent 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
The four VAT rates applicable in France in 2026#
France applies four VAT rates defined under Articles 278 to 281 of the CGI and confirmed by current BOFiP guidance:
| Rate | Legal basis | Examples |
|---|---|---|
| 20% (standard rate) | CGI art. 278 | Services, industrial products, clothing, electronics, professional fees, accounting |
| 10% (intermediate rate) | CGI art. 279 | Restaurant meals (excl. alcohol), renovation works on dwellings, passenger transport, non-reimbursable medicines |
| 5.5% (reduced rate) | CGI art. 278-0 bis | Food products, physical and digital books, disability equipment, gas and electricity subscriptions, energy efficiency works |
| 2.1% (super-reduced rate) | CGI art. 281 quater | Reimbursable medicines (Social Security), online press registered with the CPPAP, some live performances |
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 régimes.
Calculation examples by sector#
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 résidence#
A contractor performs insulation works for €5,000 HT. The dwelling is more than two years old and used as a primary résidence. 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.
Special cases that alter the calculation#
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).
Quick référence table: rates and conversion coefficients#
| VAT rate | HT to TTC coefficient | TTC to HT coefficient |
|---|---|---|
| 2.1% | × 1.021 | ÷ 1.021 |
| 5.5% | × 1.055 | ÷ 1.055 |
| 10% | × 1.10 | ÷ 1.10 |
| 20% | × 1.20 | ÷ 1.20 |
Mandatory invoice details related to VAT#
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.
Conclusion#
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 déclarations.
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(Official sources: CGI art. 278 to 281, BOFiP — VAT rates and taxable base, Entreprendre.Service-Public.fr, impôts.gouv.fr)
Frequently asked questions
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.
English practical addendum#
This English section is written for international readers who need to apply the French guidance to a real management decision. The key point for calculating French VAT-exclusive and VAT-inclusive prices is not to memorise every technical rule, but to connect the rule to documents, deadlines, cash impact and governance. For business owners preparing quotes, invoices and price lists, the right approach is to identify the decision to be made, collect reliable evidence, and only then choose the accounting, tax, payroll or legal treatment.
The practical decision is which VAT rate and rounding method should be applied to each product or service. That decision should be documented before the year-end close, financing discussion, payroll run, transaction signing or tax filing concerned by the topic. When the matter is material, the file should include who decided, which assumptions were used, and which professional advice was obtained.
Evidence to keep#
- price list;
- VAT-rate mapping;
- invoice template;
- rounding rule;
- billing-software settings;
Small pricing errors become material when repeated across invoices, marketplaces or automated billing tools. A clean file also helps the company answer questions from banks, investors, auditors, tax authorities, employees or buyers. It is usually cheaper to prepare that evidence during the process than to reconstruct it after a dispute, audit or urgent financing request.
Article written by Samuel HAYOT
Chartered Accountant, registered with the Institute of Chartered Accountants.
Regulated French accounting and audit firm based in Paris 8, built to support companies across France with a digital and decision-oriented approach.
Sources
Official and operational sources cited for this page.
This topic is part of our service Business law support in France | Corporate secretarial
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