Knowing VAT rates and formulas helps whenever you need to calculate prices with or without VAT. In Turkey, the main rates are 1%, 10% and 20%. Rates can change by law — always verify against current official sources.
Current VAT Rates (Summary)
1% (basic foodstuffs, newspapers, etc.), 10% (food products, transport, accommodation, etc.), 20% (general rate; most goods and services). When in doubt, check the official rate schedule or the invoice itself.
Calculating VAT-Exclusive from VAT-Inclusive
Formula: VAT-inclusive price / (1 + VAT rate) = VAT-exclusive price. Example: 120 TL (inclusive, 20% VAT) / 1.20 = 100 TL (exclusive). VAT amount = 120 - 100 = 20 TL.
Calculating VAT-Inclusive from VAT-Exclusive
Formula: VAT-exclusive price x (1 + VAT rate) = VAT-inclusive price. Example: 100 TL (exclusive) x 1.20 = 120 TL (inclusive).
Practical Use
Always check whether an invoice or contract states "VAT included" or "VAT excluded" — the difference is significant for budget planning. If you are building a monthly budget, use VAT-inclusive figures so you see your actual payment amounts.
Tip
Use the VAT calculator in butce.app's financial tools section to quickly switch between inclusive and exclusive prices.
Calculating VAT correctly is necessary for reading invoices and contracts accurately. But keeping track of your actual spending — the VAT-inclusive amounts you pay — is a separate step. Entering expenses by category and seeing your monthly spending report requires tracking those real payment amounts consistently, not just knowing the formula.