# VAT tax exemption

*Last updated: 2026-06-19*

> VAT exemption removes the tax charge from specific transactions by law, rather than reducing the rate to zero.

VAT exemption removes the tax charge from specific transactions by law, rather than reducing the rate to zero. The clearest example in trade is export: once goods leave EU VAT territory, the supply is exempt. The same applies to intra-EU supplies to VAT-registered businesses and, in many cases, to international freight transport services. The critical practical distinction is between exemption and zero-rating: a zero-rated supply still allows the supplier to recover input VAT, whereas a genuinely exempt supply does not. Freight forwarders and customs agents encounter this distinction regularly, as it directly affects invoicing, cash-flow planning, and the deductibility of upstream costs.

**Source:** [https://ec.europa.eu/taxation_customs/business/vat/eu-vat-rules_en](https://ec.europa.eu/taxation_customs/business/vat/eu-vat-rules_en)

## Quick Facts

| Property | Value |
|---|---|
| Term | VAT tax exemption |
| Language | EN |
| Word count | 102 |
| Last updated | 2026-06-19 |
| Source | https://ec.europa.eu/taxation_customs/business/vat/eu-vat-rules_en |

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