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HM Revenue and Customs (a department similar to the Internal Revenue Service in the United States) reports that as a rule of thumb, foods made for human consumption are VAT exempt. Some exceptions include alcoholic drinks; confectionery; potato chips and savory snacks; food for catering or takeout; ice cream; soft drinks; and mineral water. Some services that are VAT exempt are physical education and sports activities, charitable fund raising events and admission charged by cultural authorities to events.
Most products made for the disabled are VAT exempt. Items are evaluated on whether they can socially or educationally advance or ease the burdens of a disabled person. Every year, items are reviewed to determine suitability for VAT exemption. Among the exemptions are wheelchairs, shower seats and hand-control equipment for cars. Other products with VAT-exempt status include hearing aids, talking calculators for the blind and kitchen equipment, such as specialty spoons with extra long handles or special drinking cups with spill-proof lids.
The National Revenue Fund defines what products or services are exempt from VAT. Some of these include financial services; goods donated not for gain (such as those in a thrift store); goods or services used for educational purposes, such as school computers; membership contributions to an employee organization (such as labor union dues); and rent paid on a house by the renter to the landlord.
The VAT in Australia is called the Goods and Services
Tax (GST). The field of GST-exempt goods and services is very narrow, with strict and complicated criteria needed to achieve exempt status. For a not-for-profit organization, such as a charity or a government school, most goods and services are GST exempt. Examples of these include items sold in a thrift store and charitable bingo games.
School products, including paper and computers, are also GST exempt. Medical aids and services that are GST exempt include heart monitors; communications aids for the disabled (voice output devices, page turners, alternative keyboards); home dialysis machines; hearing aids; and nebulizers for the breathing impaired. Basic foods are also considered exempt, among them eggs; fruits and vegetables; meat; bread; cheese; sugar; and infant formula.
Included in goods and services exempt from VAT are the sale of land, books and building materials used for residential construction, according to Mexconnect. Other items include medical service fees, educational materials (such as school supplies), and the rental of residential property. There is also a zero percent tax rate on many items and services, meaning the amount paid for the item can be used as a credit against any VAT due on taxable goods. Food, goods for export and equipment rentals fall under this category.
The VAT in Japan is called the Consumption Tax (CT), The list of CT-exempt goods and services includes medical services; stamps; the sale of goods for export only; real estate sales; foreign currency transactions (buying and selling currencies); and interest payments received.