VAT Basis
VAT basis defines whether prices and pricing calculations are handled net (excluding tax) or gross (including tax), shaping how margins are computed.
What VAT basis means
VAT basis is the choice of whether a price is treated as net of value-added tax or gross (tax-inclusive). In many markets, including most of Europe, guest-facing wine prices are displayed gross, the listed figure already includes VAT, while supplier costs and margin calculations are often handled net. The VAT basis you choose determines how cost, markup, and selling price relate to one another in every calculation.
Getting the basis explicit matters because tax is not margin. A wine listed at 30 gross with 20% VAT yields only 25 net to the business; treating the full 30 as revenue would overstate margin and distort pour-cost and COGS figures.
Why it matters
Mixing net and gross handling is a common and costly source of pricing error. If markup is applied on a gross figure that already includes tax, margins quietly shrink; if VAT is forgotten on the cost side, they appear inflated. A consistent, declared VAT basis keeps pricing math correct and comparable across products and venues.
In a wine program, the pricing layer should let you set the basis once and apply it everywhere rather than re-deriving it by hand. Vinius supports explicit VAT basis choices in its pricing engine, so markup and rounding rules operate on the correct figure and margins stay accurate.
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