VAT Exemptions

VAT exemptions refer to specific goods or services that are not subject to Value Added Tax (VAT). This means that businesses do not charge VAT on these items when selling them, and they cannot reclaim VAT on related purchases. Common examples include certain educational services, healthcare, and financial services. The goal of these exemptions is often to reduce the cost of essential services or to encourage investment in specific sectors. While it helps consumers by keeping prices lower, it can also complicate accounting for businesses, as they need to manage both VAT taxable and exempt transactions.