VAT can be strange, complicated and weird.
VAT is complicated - there's no point in arguing otherwise. It changes regularly with different rules applying for different countries. Trying to keep up with all the different regulations around the world is difficult. Take a look below at the (somewhat strange) VAT rates around the world we've come across, from buried treasure to peanuts!
- If nuts are sold in their shell (e.g. pistachio nuts, monkey nuts, etc) they have 0% VAT, however without their shell – VAT is charged (UK)
- Gingerbread is an odd one – there is no VAT charged on gingerbread sold if it has two chocolate spots for eyes. However, for any chocolate based addition to this – VAT is charged. (UK & IRE)
- An oldie but a goodie – Jaffa Cakes are deemed as a cake rather than a biscuit in the VAT world, so there is no VAT paid in the UK. The Revenue also deemed them as cakes, due to their moisture content being higher than 12%, so they are charged at a reduced rate of 13.5%. (EU)
- If you are gifted a sum of money, for whatever reason, then thankfully you don’t pay tax. However, if you simply “find” the money, or better yet, buried treasure, then you must pay tax on it! (US).
- Chess, Scrabble and Monopoly are seen as “luxury” goods – so, you guessed, VAT is added! (India)
- Luxury goods are essentially those deemed as “wants” rather than “needs” around the world. – so therefore include VAT. Some goods that may be deemed as luxurious goods around the world (so VAT is paid) include Tampons, orange squash and Labrador pet food - yes specifically labrador (UK)
- In restaurants – food consumed on the premises or in communal areas designated for customers to use, must be charged VAT. However, takeaway foods (including home deliveries) designated as “cold food” does not have VAT charged – but “hot food” does. (UK & IRE)
As you can see from our list, confectionery (snacks, chocolate and cakes) is often one that has very complicated rules regarding VAT. Employees traveling will have a sweet tooth! What’s more – you might be able to recover this sweet VAT back.
We know that Indirect taxes such as VAT and GST can have a huge effect on your business. As VAT rates change sporadically keeping yourself informed can be difficult. Compliance is always crucial. That’s why our Indirect Tax Experts share their hand-picked news stories every day that you need to know. From breaking news to VAT changes and new EU legislation. We know that relevant information means better decision making. We aim to be your number 1 source for VAT and GST news.
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