Hi,

In the UK localisation Odoo provides two different 0% tax templates because, under UK VAT rules, there is a distinction between zero-rated supplies and exempt supplies, even though they both end up reported in VAT Box 6 (sales) and Box 7 (purchases).

• 0% (Zero-rated) → This is for goods and services that are taxable but at a 0% rate (e.g. children’s clothes, most food, books). These are still considered taxable supplies, so the seller must record them, and the buyer can usually still reclaim input VAT. In Odoo, this is reflected as 0% EX or 0% Zero.
• Exempt → This applies to goods and services that are not taxable at all (e.g. certain financial services, insurance, postage). Since they are not taxable supplies, input VAT related to them is not reclaimable.

So while both look like "no VAT charged," the difference is legal and accounting: zero-rated is taxable at 0% (keeps the right to recover VAT on inputs), while exempt is outside the VAT system (no input VAT recovery). Odoo gives you both options so you can properly classify sales and purchases depending on the type of transaction.

Hope it helps