Remove VAT from the Italian selling price correctly
At 22% standard VAT, €34.90 contains €6.29 of output VAT and €28.61 of revenue excluding VAT. Divide by 1.22; do not subtract 22% of the customer price. The standard rate is only a starting input for a standard-rated transaction.
Revenue excluding VAT = €34.90 / 1.22 = €28.61; output VAT = €34.90 − €28.61 = €6.29Keep the illustrated order and fee base visible
Assume a 9% platform fee and a 10% creator rate on half of comparable orders, equivalent to a 5% blended creator cost in this equal-value example. The product costs €10.00, fulfilment €4.20, packaging €0.60 and advertising €3.50 per order. These are invented inputs for checking the arithmetic, not Italy market averages.
The example has no buyer-paid shipping, coupons or refunds. Costs use a consistent basis excluding recoverable input VAT where applicable; displayed amounts are rounded after calculation.
Subtract the direct costs from €28.61 of revenue excluding VAT to get €5.42 of contribution. A 10% contribution target on gross sales would reserve €3.49. Compare that target with the actual result before committing to a discount, creator offer or higher ad budget.
| Line | Amount | Basis |
|---|---|---|
| Revenue excluding VAT | €28.61 | €34.90 / 1.22 |
| Platform commission | €3.14 | 9% of gross item amount |
| Blended creator cost | €1.75 | 10% rate × 50% attributed share |
| Product cost | €10.00 | Illustrative landed cost |
| Fulfilment + packaging | €4.80 | Illustrative direct expense |
| Advertising | €3.50 | Illustrative allocated spend |
| Contribution | €5.42 | Before unallocated overhead and business taxes |
Verify the SKU before using a 7% category rate
If the confirmed category rate falls from 9% to 7%, contribution rises from €5.42 to €6.12 in this scenario. That does not make every item described as electronics eligible, and mixed baskets need item-level rates. An eligible account may use 4% for 60 days; check the category and promotional rate separately before setting the price.