Learn how to determine if your sale is exempt from tax in QuickBooks Online.
Learn about tax-exempt items
Generally, you're not required to collect VAT for the following items:
- Resold items: Retailers don't typically have to pay VAT on wholesale purchases. It's assumed that the end consumer will pay VAT on these items at the point of purchase.
- Raw materials: If you produce and sell goods that will be used as raw material for other goods, these items are typically considered VAT exempt.
- Transactions with nonprofit organisations: Sales made to nonprofit organisations are normally exempt from VAT. If you conduct business with tax-exempt organisations, you'll need to get a copy of the buyer's tax-exempt number or certificate.
|Note: Always check with your tax authority as to which goods and services are subject to VAT.