Zero-rated and exempt

Three kinds of sale carry no tax on the invoice, yet each is treated differently in your tax return: zero-rated, exempt and out of scope. The difference decides whether the sale counts towards your turnover and whether you can claim back the tax on your own costs. This page explains them with each country’s own terms. It is general information, not tax or legal advice: check the sources at the end or ask your accountant before you rely on it.

In short

	Zero-rated	Exempt	Out of scope
What it is	A taxable sale charged at 0%	A sale the law leaves untaxed	Outside the tax altogether
Singapore	Exports of goods, international services	Financial services, residential property, investment precious metals	Goods sold overseas that never enter Singapore, private transactions
Australia	GST-free: exports, basic food, medical services, education courses	Input taxed: financial supplies, residential rent	Sales not connected with Australia
New Zealand	Exports, land sold between GST-registered parties	Financial services, residential rent, penalty interest	No separate term
Japan	免税 (export exemption): exports and some services to non-residents	非課税: land, interest, school education, residential rent	不課税: salaries, donations, subsidies, dividends

In Singapore, Australia and Japan, the tax on the costs of a zero-rated, GST-free or export sale can still be claimed back. For an exempt or input-taxed sale it cannot, apart from limited allowances such as Singapore’s de minimis rule for businesses with small exempt sales.

Country by country

Singapore

Zero-rated supplies are taxable supplies charged at 0% instead of 9%. Exports of goods qualify only if, at the time of supply, the goods will be or have been exported and you hold the required documents; services qualify only if they fall within the international services listed in the GST Act, and not every service to an overseas customer does. Exempt supplies are financial services, digital payment tokens, the sale and lease of residential property and investment precious metals. Out-of-scope supplies, such as goods sold overseas that never enter Singapore, are not charged GST and are not reported in the GST return. Taxable turnover for registration counts zero-rated supplies but not exempt or out-of-scope ones. On one invoice, exempt and zero-rated items are distinguished from the rest, each with its own total.

Australia

GST law has two classes. A GST-free supply bears no GST; examples in the Act are food (but not food eaten on the premises), medical services, education courses and exports of goods. An input taxed supply also bears no GST; examples are financial supplies and residential rent.

New Zealand

A zero-rated supply is charged GST at 0% when its requirements are met, such as exported goods, which must leave New Zealand within 28 days of the time of supply unless Inland Revenue agrees longer. Land sold between GST-registered parties is zero-rated when the conditions are met. Exempt supplies are not subject to GST and are left out of the GST return: financial services, residential rent and interest charged on overdue accounts are examples.

Japan

Japan distinguishes three treatments. 免税 (export exemption) removes the tax from exports, and the tax on related costs can still be deducted; keep the export evidence for 7 years. 非課税 (non-taxable) covers transactions the law deliberately leaves untaxed, such as land, interest and insurance, school education and residential rent. 不課税 (out of scope) covers what is not a domestic business supply for payment, such as salaries, donations, subsidies and dividends.

Malaysia and Brunei

Malaysian service tax applies only to services prescribed as taxable; anything else carries none. Some professional services are excluded when provided in connection with goods or land outside Malaysia, and residential rental is not subject to service tax. Brunei has no GST or VAT.

In easySales

• For a GST-registered company in Singapore, the tax choices are None, zero-rated and standard-rated 9%, with exempt and out-of-scope codes under Advanced tax codes. See GST and tax invoices.
• None means the tax is not decided yet. Before issuing, the dialog asks whether those lines are zero-rated, exempt or out of scope, because each goes in a different box of the return. See Issue an invoice.
• Australian companies choose GST 10%, GST-free, Input taxed or BAS excluded; New Zealand companies GST 15%, GST 0% or Exempt. See Country tax & invoice rules.

Examples

Lim & Co, GST-registered in Singapore, designs a showroom in Kuala Lumpur and ships furniture there, holding the export documents: the furniture is zero-rated at 0%. It also lets a flat it owns to a tenant, which is an exempt supply. On the export, Lim & Co can still claim the GST it paid on its costs; on the flat it cannot, unless IRAS’s de minimis rule lets it. Only the zero-rated sale counts towards its taxable turnover.

Common questions

• What is the difference between zero-rated and exempt? A zero-rated sale is taxable at 0%, and the tax on its costs can be claimed. An exempt sale is not taxable, and in Singapore the tax on its costs is not claimable.
• What does out of scope mean for GST? The sale is outside the GST system altogether. In Singapore you neither charge GST on it nor report it in the return.
• What is GST-free in Australia? The Australian name for a sale that bears no GST but keeps the right to claim credits on its costs, such as basic food and exports.
• What is the difference between 非課税 and 免税 in Japan? 免税 is the export exemption, which keeps the deduction for the tax on costs. 非課税 is a transaction the law leaves untaxed, such as land or residential rent.
• Can I zero-rate a service to an overseas customer? In Singapore only if it falls within the international services the GST Act lists; not every service to an overseas customer does.
• Do zero-rated sales count towards the GST registration threshold? In Singapore, yes. Exempt and out-of-scope sales do not. See Registering for GST.

Sources

Last checked: 21 October 2026.

• IRAS — When to charge GST
• IRAS — Providing international services
• IRAS — Exporting of goods
• IRAS — Supplies exempt from GST
• IRAS — Out-of-scope supplies
• Federal Register of Legislation — GST Act 1999, section 9-5 and Divisions 38 and 40
• Inland Revenue NZ — Zero-rated supplies
• Inland Revenue NZ — Exempt supplies
• Inland Revenue NZ — GST guide IR375 (PDF)
• National Tax Agency Japan — Tax Answer No. 6551 (Japanese)
• National Tax Agency Japan — Tax Answer No. 6201 (Japanese)
• National Tax Agency Japan — Tax Answer No. 6157 (Japanese)
• RMCD MySST — Registering a business
• RMCD MySST — FAQ on the expansion of service tax scope 2025

Related

• GST and tax invoices
• Company and tax
• Registering for GST
• Country tax & invoice rules