What is a zero-rated supply?

A supply of goods and services is called zero-rated when it is legally taxable, but only taxed at 0%. Although this sounds very similar to an exempt supply, there is one major difference: businesses supplying zero-rated supplies can deduct their input VAT and claim refunds for the tax paid for purchases, whereas businesses supplying exempt supplies cannot.Examples of zero-rated supplies include: exports made to non-GCC countries, international transportation services, sale of investment metals, and medicines and medical supplies.