Using named constants is an element of good spreadsheet design. By having a constant in one place, i.e. a defined name, you only need to change it in one place, should the need arise. This can help prevent errors in your spreadsheets.
To define a named constant, select Insert>Name>Define from the menu. Here, I’ve created a defined name called SalesTax and set it equal to 7%.
I can use this named constant in formulas. In the example below, I extend line amounts adding the sales tax.
Now when the government decides to increase the sales tax, I need only to change the named constant, not every formula on the sheet. In the example below, I’ve redefined SalesTax to =.075 to represent a 1/2% increase in the sales tax.
If you don’t know what sales tax is, you probably pay VAT. I think they’re roughly the same.