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Issues:

1. Vat is unused as an argument, and even if it were used it would always be reinitialized in your code and assigned a value of 20.
2. priceb was a typo.

Beyond that the code doesn't seem to have any evident problems.

function getTotalPrice(price1, price2, vat) {
 vat = (vat === undefined? 20 : vat); // give vat a default value if empty
 return (price1 + price2) * vat;
}
document.write(getTotalPrice(4, 3));

Edit: Per the comment below, which is true, I figured I should just go ahead and simplify the math here. If the asker has a different equation in mind he should probably explain a bit more.

Edit: (vat === undefined? 20 : vat) is correct, producing any value other than undefined, default 20. (vat === undefined? vat : 20) will only produce undefined or 20.