VAT is a percentage-based tax added to most goods and services, but the actual calculation on an invoice often causes confusion, especially when an invoice contains several lines with different VAT rates. Here is how the mechanics work, with a concrete example.

Price excluding VAT, VAT amount, and total

An invoice should normally show three things, per line or as a summary: the price excluding VAT (what you actually earn from the sale), the VAT amount (what you collect on behalf of the state), and the total including VAT (what the customer actually pays).

How to calculate the VAT

The VAT amount is calculated by multiplying the price excluding VAT by the VAT rate. For example: you sell a consulting service for 10,000 SEK excluding VAT, at 25 percent VAT. The VAT amount is then 10,000 × 0.25 = 2,500 SEK, and the total to pay is 12,500 SEK.

Working backwards from a price including VAT

Sometimes you only know the final price, what the customer pays in total, and need to work out how much of it is VAT. At 25 percent VAT, you divide the total by 1.25 to get the price excluding VAT, and the difference is the VAT amount. If the total was 12,500 SEK, the price excluding VAT is 12,500 / 1.25 = 10,000 SEK, and the VAT is 2,500 SEK.

When an invoice has multiple VAT rates

If you sell both goods and services with different VAT rates on the same invoice, for example a product at 25 percent and a service at 6 percent, VAT should be calculated per line, not on the invoice total all at once. The invoice should then end with a VAT breakdown showing the amount per rate, so both you and the customer can clearly see how much VAT applies to each rate.

Common mistakes

A common mistake is calculating VAT on the whole invoice total with a single rate when the lines actually carry different rates. Another is rounding errors building up line by line instead of being calculated consistently, which can make the total off by a few cents or öre.

In FakturaKlar, VAT is calculated automatically per line based on the rate you selected, and a clear VAT breakdown is shown on the invoice, so you avoid calculating by hand or risking rounding errors.

Sources

Mervärdesskattelagen (2023:200), the Swedish VAT Act, and the Swedish Tax Agency's guidance on VAT, see skatteverket.se.