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Is 0% a valid tax rate of VAT?
0% tax rate is a valid tax rate which is used by some countries(primarily in the EU region) to distinguish between exempt and taxable goods.
A reduced rate, <5% and sometimes “0%(zero-rated) tax” is applied on certain goods by the EU member states. This rate is considered as a taxable rate of VAT and the revenue generated from zero-rated goods(applicable only to selected items) is still included in the taxable revenue.
In case of “exempt” supplies, businesses cannot register for VAT and are not entitled to a VAT reclaim on their business expenditure.
Here’s more on the EU VAT requirements and how they can be configured in Chargebee.
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