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<ManualTopic ID="/baanerp/tc/onlinemanual/000452" xml:lang="en">
   <Header>
      <Title>To set up tax exemptions</Title>
      <Keyword type="header" order="d1e1457118">
         <Level1>Tax</Level1>
         <Level2>tax exemptions</Level2>
      </Keyword>
      <Keyword type="header" order="d1e1457123">
         <Level1>Tax</Level1>
         <Level2>direct pay tax</Level2>
      </Keyword>
   </Header>
   <GeneralSection>
      <Paragraph>Transactions with specific business partners, involving specific
		goods, and/or with their origin or destination in certain countries or areas,
		can be exempt from tax. Sales invoices for transactions that are exempt from
		tax must have zero tax amounts.</Paragraph>
      <Paragraph>Some enterprises are exempt from <Link href="/baanerp/tc/glossary/glossary#000421" role="glossary">destination sales tax</Link> within the jurisdiction of certain
		tax authorities. Invoices for sales to a customer with a valid tax exemption
		must have zero tax amounts. If your business is exempt from sales tax, your
		suppliers must not include the tax amount on their invoices.</Paragraph>
      <Paragraph>To an organization that is exempt from tax, the tax authorities
		supply a <Link href="/baanerp/tc/glossary/glossary#000332" role="glossary">tax exemption certificate</Link>. You must register the tax
		exemption certificate numbers of your sold-to business partners. To supply your
		tax exemption certificate number to your buy-from business partners, you must
		print the certificate number on the purchase orders.</Paragraph>
      <Paragraph>If you have one or several <Link href="/baanerp/tc/glossary/glossary#000333" role="glossary">direct pay</Link> certificates, you
		can set up the direct pay tax in the same way as tax exemptions.</Paragraph>
   </GeneralSection>
   <GeneralSection>
      <SectionTitle>Tax exemptions if you use a tax provider</SectionTitle>
      <List>
         <ListIntro>The use of a tax provider has the following effect on the tax
		  exemption setup:</ListIntro>
         <ListItemHead>Sales orders</ListItemHead>
         <ListItem>If you use a <Link href="/baanerp/tc/glossary/glossary#000013" role="glossary">tax provider</Link>, do not set up tax exemptions for sales orders. The tax
		  provider takes care of the sales tax exemptions.</ListItem>
         <ListItemHead>Purchase orders</ListItemHead>
         <ListItem>If you use a tax provider, you can set up tax exemptions for
		  purchase orders. ERP Enterprise passes on this information to the tax provider.</ListItem>
      </List>
      <Paragraph>In the <GUIRef href="/baanerp/tc/tax/tctax1100m000" role="session">Tax Exceptions by Country (tctax1100m000)</GUIRef> or the <GUIRef href="/baanerp/tc/tax/tctax1101m000" role="session">Tax Exceptions by Country Set (tctax1101m000)</GUIRef> session, you can define exempt tax codes
		for purchase orders. and specify your company's <Link href="/baanerp/tc/glossary/glossary#000332" role="glossary">tax exemption certificates</Link>. For every tax exemption certificate, you must specify the
		effective date, the expiry date, and the exempt reason.</Paragraph>
      <Paragraph>If you use a tax provider, you can define exempt tax codes and
		specify tax exemption certificates for purchases by country and state/province.
		If you do not use a tax provider, you can specify tax-exemption certificate
		numbers by country and tax code.</Paragraph>
   </GeneralSection>
   <GeneralSection>
      <SectionTitle>Tax exemption details</SectionTitle>
      <List>
         <ListIntro>In many countries, one or several of the following details
		  must be printed on orders, invoices, and reports with an exempt tax
		  code:</ListIntro>
         <ListItemHead>The tax exemption certificate number</ListItemHead>
         <ListItem>To print <Link href="/baanerp/tc/glossary/glossary#000332" role="glossary">tax exemption certificate</Link> numbers and <Link href="/baanerp/tc/glossary/glossary#000333" role="glossary">direct pay</Link> certificate
		  numbers on orders and invoices, select the <GUIRef href="/baanerp/tc/mcs/tcmcs0110s000#tcmcs010.txmp" role="manual">Print Tax Exemption</GUIRef> check box for the <Link href="/baanerp/tc/glossary/glossary#000337" role="glossary">tax country</Link> in the <GUIRef href="/baanerp/tc/mcs/tcmcs0110s000" role="session">Countries (tcmcs0110s000)</GUIRef> session.</ListItem>
         <ListItemHead>A reference to the tax law article</ListItemHead>
         <ListItem>
            <Paragraph>To print the reference to the tax law article on invoices,
			 link the text to the tax code. For details, refer to <Link href="/baanerp/ci/onlinemanual/000024" role="manual">To print tax articles on invoices</Link>.</Paragraph>
            <Paragraph>If you are exempt from tax, and the tax code is used on
			 purchase orders, ERP Enterprise prints the text on the purchase order acknowledgements.</Paragraph>
         </ListItem>
         <ListItemHead>The tax exempt reason</ListItemHead>
         <ListItem>The exempt reason indicates why the sold-to business partner
		  is exempt from tax. If you specify an exempt reason in the <GUIRef href="/baanerp/tc/tax/tctax1100m000" role="session">Tax Exceptions by Country (tctax1100m000)</GUIRef> or the <GUIRef href="/baanerp/tc/tax/tctax1101m000" role="session">Tax Exceptions by Country Set (tctax1101m000)</GUIRef> session, ERP Enterprise automatically
		  prints the reason description on the sales invoice.</ListItem>
      </List>
   </GeneralSection>
   <GeneralSection ID="methods">
      <SectionTitle>Tax exemption setup methods</SectionTitle>
      <List>
         <ListIntro>In the <GUIRef href="/baanerp/tc/tax/tctax0100m000" role="session">Tax Parameters (tctax0100m000)</GUIRef> session, you must select a tax exemption setup method.
		  Two methods are available:</ListIntro>
         <ListItemHead>
            <GUIRef href="/baanerp/tc/domains/tax.telv#limited" role="option">Limited</GUIRef>
         </ListItemHead>
         <ListItem>Use the <GUIRef href="/baanerp/tc/domains/tax.telv#limited" role="option">Limited</GUIRef> method to specify the exempt tax codes for various
		  order types for a country. For orders for which you select the <GUIRef href="" role="manual" Update="No">Tax Exempt</GUIRef> check box in the order header, ERP Enterprise uses the exempt tax
		  code. For details, refer to <Link href="/baanerp/tc/onlinemanual/000453" role="manual">The Limited method to set up tax exemptions</Link>.</ListItem>
         <ListItemHead>
            <GUIRef href="/baanerp/tc/domains/tax.telv#extended" role="option">Extended</GUIRef>
         </ListItemHead>
         <ListItem>Use the <GUIRef href="/baanerp/tc/domains/tax.telv#extended" role="option">Extended</GUIRef> method to set up tax exemption for specific
		  business partners or orders with specific order details, and enter the exempt
		  certificate number or direct pay certificate number and the exempt reason. If
		  you use the <GUIRef href="/baanerp/tc/domains/tax.telv#extended" role="option">Extended</GUIRef> method, ERP Enterprise determines whether the exempt tax code applies
		  to an order. For details, refer to <Link href="/baanerp/tc/onlinemanual/000454" role="manual">The Extended method to set up tax exemptions</Link>.</ListItem>
      </List>
   </GeneralSection>
   <RelatedTopics>
      <SectionTitle>Related topics</SectionTitle>
      <RelTopic>
         <Link href="/baanerp/tc/onlinemanual/000453" role="manual">The Limited method to set up tax exemptions</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/tc/onlinemanual/000454" role="manual">The Extended method to set up tax exemptions</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/tc/onlinemanual/000440" role="manual">To test the tax model</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/tc/onlinemanual/000105" role="manual">Sales tax</Link>
      </RelTopic>
   </RelatedTopics>
</ManualTopic>