VAT exemption

VAT exemption means that certain goods or services are not subject to Value Added Tax, so they are sold without adding this tax to the price. This typically applies to essential items like basic food, healthcare, or education to make them more affordable, or to specific organizations such as nonprofits. When a product or service is VAT-exempt, suppliers do not charge VAT to customers, nor do they reclaim VAT paid on their business expenses related to those exempt supplies. Essentially, VAT exemption reduces the tax burden on specific items or services for consumers and providers.