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Accounting & Tax vocabulary · Income & Corporate Tax

Tax exemption

Meaning in accounting & tax, with examples

nounCommon term

In accounting & tax, tax exemption means: A rule that removes certain income, transactions or organisations from tax, either completely or up to a set limit.

In Turkish: vergi istisnası, vergi muafiyeti

How it is used

Exemptions are granted, claimed, or lost when the conditions are not met. Common examples include exports, some investment incentives and income below a threshold.

Example sentences

  1. Export sales qualify for a tax exemption, so no VAT appears on the invoice.

  2. The company lost its tax exemption because it didn't meet the employment conditions.

Common collocations

  • claim a tax exemption
  • tax-exempt
  • exemption threshold
  • VAT exemption
  • taxable incomeThe part of income on which tax is actually calculated, after allowed expenses, exemptions and allowances have been deducted from total income.
  • tax-deductibleAllowed by tax law to be subtracted from income when calculating taxable profit, which reduces the amount of tax to pay.
  • VATValue added tax: a tax on the sale of most goods and services, collected at each stage of the supply chain and finally paid by the end consumer.
  • income taxA tax on the income of individuals, such as salaries, rent, business profits and investment income, usually charged at rates that rise as income rises.
  • corporate taxA tax on the taxable profits of companies, calculated on the profit for the year after allowed deductions and adjustments.

More terms: Income & Corporate Tax

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This page explains English vocabulary for learners. It is not financial advice.