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What is the difference between the adjectives "duty-free", "tax-free" and "tax exempt"?

As usual no dictionary could help me distinguish between them. Please have a look on e.g. Cambridge's definitions:

Duty-free

  • Duty-free goods are goods bought in special shops in airports, on ships, etc. on which you do not pay government tax.

Tax-free

  • If something is tax-free, you do not pay tax on it.

Tax-exempt

  • Used to describe a product, service, or financial arrangement on which no taxes have to be paid.

Now, I wonder:

  1. What shall I call a product that its sale does not include tax.

  2. What do you call a person/company which is not compelled to pay any tax.

To me, "tax-free" and "tax-exempt" are pretty much interchangeable and can be swapped freely for both cases #1/2 without any specific change in the meaning, whereas the term "duty-free" is only belongs to the products free of tax within airports/ships.

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"Duty free" is specific to imports, duty is a fee that you pay when you import goods. "Duty free" is not the right term.

"Tax exempt" is a property of the product that means that sales tax is not raised on it. For example, in the UK, Foodstuffs are exempt from VAT. Accountants might say that actually food is "zero-rated", but it comes to the same thing.

You could also use "tax free" in the same sense, it means the same, but is perhaps a little less formal. You could also use "tax free" if the item would normally be taxed, but for some reason the purchacer doesn't need to pay the tax on it.

Finally "tax deductable" means that you pay tax on the item, but can reclaim this tax. It usually refers to charity donations and items bought for the workplace.

Gold bullion is Value-Added Tax exempt, however if you resell for a higher price then you may be liable for Captial Gains Tax.

Many department stores in Japan have a "Tax Free" counter, where foreign tourists can reclaim the sales tax on purchases made in Japan.

If you purchase at the duty-free shop, be aware of your allowance. You can bring up to 1L of brandy into the UK duty-free. Above that amount, you may have to pay excise duty.

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