How to add income transaction without VAT? VAT rate is mandatory in QB. This is for grants. Grant is not 0, not exempt - no VAT shall even be mentioned, it's out of scope

Thanks for posting here and sharing your insights about the VAT feature in QBO, @user92803,

We want to make sure your entries are reported correctly on your books and tax forms. Talking about non-VAT income, QuickBooks is enabled to apply VAT for every transaction.

QuickBooks does not detect grants and automatically exclude them from the VAT calculations. This is the reason why you are given the option to use the No VAT option to account for those transactions that shouldn't be reported for VAT. You can also use a custom rate for 0% and apply it to your income entries.

See this:

See this link to learn more about the tax processing feature in QBO: How do I set up sales GST/VAT rates and use them on forms? (International QBO)

If you need further help with this, please post here again. I'll be more than happy to share some insights with you. Have a good one!