Zero-rated Goods

Zero-rated goods are only in countries that use VAT, or value-added tax. VAT is a tax that's applied to each stage of good-production. Step one: goods created...taxed. Step two: goods sent to be packaged...taxed. Step three: goods transported to stores...taxed. Each time value is added to goods, a tax is collected. Often, VAT and a sales tax is included in VAT countries. That’s the VAT life.

VAT is pretty common in Europe, but elsewhere too. Definitely in more countries than you could name right now, times five or ten.

In VAT-lands, zero-rated goods are goods that are exempt from VAT. The holy grail zero-rated goods in VAT countries can include things like certain consumables (foods and drinks), technology that helps disabled people, donated goods to charities, prescription medications, water services, kids’ clothing, and printed things (goodness knows they need a break in the era of the internet).