what are zero rated goods 
zero rated goods in countries that use value added tax vat are products that are exempt from that value taxation understanding zero rated goodsin most countries the government mandates a domestic vat requirement for goods and services in most reported data the total price of products sold in a country includes the vat and is an additional charge to sales tax in most transactions the vat is a form of consumption tax countries using vat designate certain goods as zero rated goods zero rated goods are typically individualized items countries designate these products as zero rated because they are leading contributors to other manufactured goods and a significant component of a broader supply chain also many food items are identified as zero rated goods and sell with 0 vat examples of items that may be zero rated include certain foods and beverages exported goods donated goods sold by charity shops equipment for the disabled prescription medications water and sewage services books and other printed publications and children s clothing in many cases buyers use zero rated goods in production and benefit from paying a lower price for the goods without the tax a food manufacturer may use zero rated goods in the manufacturing of a food product but when the consumer buys the final product it includes a vat overall the absence of vat on zero rated goods results in a lower total purchase price for the goods zero rated goods can save buyers a significant amount of money in the united kingdom for example the standard vat rate levied on most goods is 20 and the reduced rate is 5 1