Which of the following supplies is exempt from VAT, rather than zero-rated?
Answer and explanation
Correct answer: B. Insurance premiums
- Step 1: Exempt supplies are outside the VAT charge, and the supplier cannot recover related input VAT.
- Step 2: Zero-rated supplies are taxable at 0%, with input VAT recoverable.
- Step 3: Insurance is a standard example of an exempt supply.
Answer
Insurance premiums.
Why not the others: Children's clothing is zero-rated. Most food is zero-rated. Printed books are zero-rated.
Practise more VAT and stamp taxes.
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