What is the difference between zero tax and exempt tax?
Zero tax differs from sales tax in several aspects. However, some individuals do not distinguish the difference between the two terms, although both differ in their effects and results. The following is an explanation of the most important differences between the two taxes:
- Zero Rated Tax is defined as a name given to zero-value taxes imposed on products that have no added value, and zero-rated products may include some foodstuffs, medical equipment, pure gold, silver, etc., and sellers may be able to recover any amounts paid in relation to purchases of goods or raw materials that are related to products that are subject to the zero tax when they fill in the value-added tax returns.
- The exempt tax is known as Exempt Tax, which is the exemption of some products or goods from the value-added tax. In this case, the supplier who supplies purchases related to the exempted products cannot claim the tax on them. Examples of products or services covered by the exemption include insurance and certain types of of Certain types of training, education, and some services that may be provided by doctors or a specific entity may be exempt from the tax, such as those affiliated with the National Defense Forces, the army, and others. In this case, the merchant or supplier may claim VAT on non-exempt products and related materials or purchases.
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