<p>In outline, I take the paragraph to be saying that a change in an EU country's standard rate of VAT would have little impact on its exports because few purchasers of its exports would be charged VAT.</p>
<p>Some background on VAT.  Most countries with VAT distinguish between:</p>
<ul>
<li>A standard rate chargeable on sales of most goods.</li>
<li>One or more reduced (but not zero) rates applying to selected goods;</li>
<li>Selected goods on which no VAT is chargeable. Within this category, a further distinction may be made between zero-rated and exempt goods (but this is not relevant to the paragraph).</li>
</ul>
<p>The rates and selections of goods differ between countries. Businesses, unless very small, have to register for VAT and submit periodic VAT returns.</p>
<p>The paragraph appears to be about exports from within the EU. The first sentence means that exported goods, irrespective of their nature, need have no VAT charged where the purchaser is outside the EU or is registered for VAT within another EU country.  By &quot;a change in VAT&quot; is presumably meant a change in the standard or reduced rates of VAT (and not other kinds of change). The second sentence means that exports would be affected by changes in those rates only where the purchaser is both in another EU country and not registered for VAT. The last sentence concludes that a change in standard or reduced rates is unlikely to have much impact on exports.</p>

CC BY-SA 4.0
2022-09-04T16:36:44.330Z
Hello i was wondering why is that the changes in VAT rates will only affect someone who is in the EU but not registered for VAT , if they are not registered surely they must be exempt from VAT in the first place?
user42141
CC BY-SA 4.0
2022-09-04T17:47:49.990Z
@user42141 Those who are not registered for VAT - consumers and some small businesses - do not have to charge VAT on any sales they make, but they certainly have to pay VAT on their purchases if subject to standard rate or reduced rate VAT.
Adam Bailey
CC BY-SA 4.0
2022-09-05T14:29:47.553Z
Oh ok so youre saying that business registered for VAT will just get that extra tax  paid of by increasing their prices , so they dont lose the amount of revenue they make
user42141
CC BY-SA 4.0
2022-09-05T19:59:15.273Z
@user42141  Sorry, I don't understand what your last comment is asking.  What do you mean by "extra tax"?
Adam Bailey
CC BY-SA 4.0
2022-09-09T19:20:25.613Z
By extra tax i mean the VAT as in like the cost incurred by the government which is the indirect tax and that tax gets paid of by business's when they increase the price of the goods they sell , so they can make up for the increase in cost
user42141
CC BY-SA 4.0
2022-09-04T11:28:07.307Z
2022-09-04T11:28:07.307Z
Adam Bailey
<p>How should the following paragraph be interpreted?</p>
<blockquote>
<p>Businesses can zero-rate goods exported outside the European Union (EU) or sent to someone who is registered for VAT in another EU country. Consequently, a change in VAT would only affect goods exported to someone in the EU who is not registered for VAT. Therefore, VAT changes by a country in the EU are likely to have very little impact.</p>
</blockquote>

<macroeconomics><taxation>
Zero-rating export goods
user42141
# Zero-rating export goods

(Asked by: username_0 on 2022-09-03)

How should the following paragraph be interpreted?

> Businesses can zero-rate goods exported outside the European Union (EU) or sent to someone who is registered for VAT in another EU country. Consequently, a change in VAT would only affect goods exported to someone in the EU who is not registered for VAT. Therefore, VAT changes by a country in the EU are likely to have very little impact.

**Tags:** macroeconomics, taxation

---

## 1 answers

### Answer by username_1 on 2022-09-04. Score: 2

In outline, I take the paragraph to be saying that a change in an EU country's standard rate of VAT would have little impact on its exports because few purchasers of its exports would be charged VAT.

Some background on VAT. Most countries with VAT distinguish between:

* A standard rate chargeable on sales of most goods.
* One or more reduced (but not zero) rates applying to selected goods;
* Selected goods on which no VAT is chargeable. Within this category, a further distinction may be made between zero-rated and exempt goods (but this is not relevant to the paragraph).

The rates and selections of goods differ between countries. Businesses, unless very small, have to register for VAT and submit periodic VAT returns.

The paragraph appears to be about exports from within the EU. The first sentence means that exported goods, irrespective of their nature, need have no VAT charged where the purchaser is outside the EU or is registered for VAT within another EU country. By "a change in VAT" is presumably meant a change in the standard or reduced rates of VAT (and not other kinds of change). The second sentence means that exports would be affected by changes in those rates only where the purchaser is both in another EU country and not registered for VAT. The last sentence concludes that a change in standard or reduced rates is unlikely to have much impact on exports.

> **Comments:**
> **username_0**: Hello i was wondering why is that the changes in VAT rates will only affect someone who is in the EU but not registered for VAT , if they are not registered surely they must be exempt from VAT in the first place?  
> **username_1**: @user42141 Those who are not registered for VAT - consumers and some small businesses - do not have to charge VAT on any sales they make, but they certainly have to pay VAT on their purchases if subject to standard rate or reduced rate VAT.  
> **username_0**: Oh ok so youre saying that business registered for VAT will just get that extra tax  paid of by increasing their prices , so they dont lose the amount of revenue they make  
> **username_1**: @user42141  Sorry, I don't understand what your last comment is asking.  What do you mean by "extra tax"?  
> **username_0**: By extra tax i mean the VAT as in like the cost incurred by the government which is the indirect tax and that tax gets paid of by business's when they increase the price of the goods they sell , so they can make up for the increase in cost  

---

