Commentary

V4.201 Overview and principles of the zero rate

Part V4 Exemption, zero-rating and reduced rates

V4.201 Overview and principles of the zero rate

Introduction to zero-rating

V4.201 Overview and principles of the zero rate

This paragraph presents an overview of the principles of the zero-rate, including:

  1.  

    •     the circumstances under which zero-rating applies

  2.  

    •     the basis for zero-rating under EU law

  3.  

    •     the effects of zero-rating

Circumstances under which zero-rating applies—overview of zero-rating

A supply of goods or services, or the acquisition or importation of goods, is zero-rated if1:

  1.  

    •     the goods or services are, or the supply, acquisition or importation is, of a description for the time being specified in VATA 1994, Sch 8 (see V4.210)

  2.  

    •     it consists of applying to the goods of another person a treatment which produces goods of a description specified in VATA 1994, Sch 8 (see V4.210)

  3.  

    •     the goods have been or are to be exported, shipped as stores

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