Zero- Rated Goods

Posted in Finance, Accounting and Economics Terms, Total Reads: 311

Definition: Zero- Rated Goods

In some countries, Value- Added Tax (VAT) is not levied on some products, especially items such as food, beverage, children’s clothing, water, books and other publications and equipment for the disabled.


Save consumers money because of the tax exemption

It is not actually a tax exemption. The difference is that, in a zero- rated good, VAT is present, it is just 0%. Whereas in a Exempt Tax, the tax is exempted altogether and there is no VAT at all.

The manufacturer can reclaim the VAT in case of Zero- Rated Goods.


Customers save a lot of money due to zero rated goods. A few examples can be basic groceries and medical supplies in a few countries.



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