Tax exemption is the reduction or removal of a liability to make a compulsory payment that would otherwise be imposed by a ruling power upon persons, property, income, or transactions.
Tax-free shopping is also found in ships, airplanes and other vessels traveling between countries (or tax areas).
However, current European Union rules prohibit most intra-EU tax-free trade, with the exception of certain special territories outside the tax area.
Some jurisdictions allow for a specific monetary reduction of the tax base, which may be referred to as an exemption.
For example, the U.S. Federal and many state tax systems allow a deduction of a specified dollar amount for each of several categories of "personal exemptions".
[8][9] The U.S. system does not distinguish between various kinds of tax-exempt entities (such as educational versus charitable) for purposes of granting exemption, but does make such distinctions with respect to allowing a tax deduction for contributions.
[11] Tax exemption status of nonprofit organizations can in some cases result in financial mismanagement and negative societal value.
For example, state and local governments are not subject to Federal, state, or local income taxes in the U.S.[13] Most systems do not tax entities organized to conduct retirement investment and pension activities for employees of one or more employers or for the benefit of employees.
[15] Some jurisdictions provide separate total or partial tax exemptions for educational institutions.
For example, a property tax exemption may be provided to certain classes of veterans earning less than a particular income level.
The European Union members are all parties to the EU multi-country VAT harmonisation rules.
These cards may only be issued to a person, who is a principal member or an employee of the mission, holds an A or G visa, and is not a permanent resident of the USA.
This card is issued to eligible foreign mission members for exemption on their personal item purchases.
The tax exemption card is required before paying for the lodging, if it is paid before acquiring it, or through the internet, the benefits are unusable.
[38] In 1 Samuel 17:25 in the Hebrew Bible, King Saul includes tax exemption as one of the rewards on offer to whoever comes forward to defeat the Philistine giant Goliath.
This community was exempt from taxes until the time of French revolution, when the republican government restored taxation.
[40] In the Ottoman Empire, tax breaks for descendants of Muhammad encouraged many people to buy certificates of descent or forge genealogies; the phenomenon of teseyyüd – falsely claiming noble ancestry – spread across ethnic, class, and religious boundaries.
In the 17th century, an Ottoman bureaucrat estimated that there were 300,000 impostors; In 18th-century Anatolia, nearly all upper-class urban people claimed descent from Muhammad.