This Public Clarification (VATP020) addresses the VAT treatment of promotions advertised as 'VAT-free' or 'VAT-on-us'. It asserts that such marketing is misleading, as suppliers must account for 5% VAT on all taxable goods and services. The Federal Tax Authority clarifies that these offers are treated as discounts, with the final price paid by the customer considered inclusive of VAT. The seller is therefore obligated to calculate and remit the correct output tax from the total consideration received. This ensures compliance with VAT obligations, particularly the rules on pricing and discounts outlined in Articles 38 and 39 of the VAT Decree-Law.