Exempt Supplies

Exempt supplies are effectively sales that a company can make that are outside the scope of VAT. That is no VAT is payable of these sales nor is any VAT reclaimable of purchases made of this nature.

VAT law dictates which items fall in to the exempt category. These are largely products and services which are deemed as necessary supplies and this it is in the public interest not to charge VAT of them. Such items include:

• Schools and other facilities involved in learning and training
• Some property transactions
• Health and hospitals
• Supplies which are exempt for VAT purposes do not form part of the VAT return calculation. This treatment is different form Zero rated supplies which are still disclosed on the VAT return even though there is no amounts payable or reclaimable as a result of the transaction. Exempt sales do not constitute taxable sales for companies.

If the company solely make supplies which are exempt, it is unlikely that a application for VAT would be accepted

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