Zero-rated supplies

Zero-rated supplies refer to goods or services that are taxable for VAT (Value Added Tax) but the tax rate applied is 0%. This means businesses selling these items do not charge customers VAT, but they can still reclaim any VAT they paid on related expenses. Common examples include basic food items and books. Although the seller does not collect VAT from the customer, the sales still count towards their total taxable turnover, allowing them to maintain their VAT registration. Essentially, zero-rated supplies help make essential goods more affordable while supporting businesses in managing their tax obligations.