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Accounting5 min read

VAT-inclusive vs. VAT-exclusive pricing: what small shops get wrong

VAT-inclusive vs. VAT-exclusive pricing: what small shops get wrong

Most shop owners price things the way customers think about them: "this costs 45,000." That price already includes VAT — it's VAT-inclusive. The tax isn't added on top at checkout; it's extracted from the price you already charged.

The mistake happens when the accounting side treats that same price as VAT-exclusive and adds tax again — turning a 45,000 sale into a 51,864 charge that was never actually collected from anyone. The customer paid 45,000. The books should reflect exactly that, with the VAT portion (about 6,864 at 18%) recorded as tax collected, not tacked on afterward.

The rule of thumb: decide once, for the whole business, whether your prices include tax or not — and make sure every screen, receipt, and report agrees. The moment one part of the system treats a price as inclusive and another treats it as exclusive, your revenue and your tax filings will quietly stop matching reality.

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