Difference Between Zero Rated VAT and Exempt VAT in UAE

Shuraatax17 Oct, 2024Finance

The difference between zero-rated and Exempt VAT in the UAE is crucial for businesses to grasp. Value-added tax (VAT) can be categorised into zero rated and Exempt in the UAE. Zero-rated VAT applies to certain goods and services that are taxed at a rate of 0%. While these supplies are technically taxable, the VAT charged is zero. Businesses that provide zero-rated supplies can reclaim the input tax they’ve paid on their expenses, benefiting their cash flow. Common examples of zero-rated supplies include exports and international transport services.