Remember that we have two values here, the price of the washing machine BEFORE and the price AFTER the 20% VAT increase. The value AFTER the increase is 600. To get to the value before, you can't simply subtract 20% of 600, because 20% of the ORIGINAL value was what the washing machine was increased by, not 20% of 600.
What we can see however is when you increase something by 20%, you can also think of it as multiplying something by 1.2. So you can simply divide 600 by 1.2 to get the original price. So 600/1.2 = 500, final answer.