To use the calculator, the user inputs the transaction details, including the purchase price and VAT paid, as well as the sale price and VAT charged. The calculator then calculates the taxable income, based on the difference between the purchase and sale prices, and applies the income tax rate to this amount. The VAT tax is also calculated by taking the difference between the VAT paid on the purchase and the VAT charged on the sale.
The calculator then subtracts the income tax and VAT tax amounts from the total profit amount to give the final after-tax profit. This allows users to better understand the true profitability of a deal after taxes are taken into account.