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Understand nontaxable sales in QuickBooks Online

SOLVEDby QuickBooksQuickBooks Online3Updated 1 month ago

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.

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