Services exempt from value added tax

Services that are exempt from tax under Article 21 of the VAT Act may be taxed voluntarily in order to deduct input tax. Certain sectors, such as insurance and gambling, are excluded from this option.

2013

Exempt services are not subject to value added tax. The exempt services are listed in Article 21 of the Value Added Tax Act. However, it may be possible to opt for taxation.

Services exempt from value added tax

No input tax deduction can be made for services exempt from value added tax. However, it is possible to opt for taxation for almost all exempt services. This means that the service is still subject to VAT, but in return, input tax can be deducted. The option cannot be exercised for insurance and reinsurance transactions, transactions in the field of money and capital transactions, or transactions relating to betting, lotteries, and other games of chance involving money.

The following areas, among others, are exempt from tax:

Hospital treatment and treatment by doctors, dentists, etc. in the field of human medicine
Services provided by social welfare and social security institutions
Certain services in the field of education and training
Provision of cultural services such as theater or film performances
Services provided by compensation funds
Sale of agricultural, forestry, and horticultural products produced on the seller's own property
Services within the same community

There are also other services that are exempt from tax. There is often uncertainty as to whether a service is exempt or not.

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