<?xml version="1.0" encoding="utf-8"?>
<ManualTopic ID="/baanerp/tc/onlinemanual/000454" xml:lang="en">
   <Header>
      <Title>The Extended method to set up tax exemptions</Title>
      <Keyword type="header" order="d1e1457364">
         <Level1>Tax</Level1>
         <Level2>tax exemptions</Level2>
      </Keyword>
   </Header>
   <GeneralSection>
      <ProcedureList>
         <ListIntro>To set up tax exemptions using the <GUIRef href="/baanerp/tc/domains/tax.telv#extended" role="option">Extended</GUIRef> method, use the following sessions:</ListIntro>
         <ListItemHead>
            <GUIRef href="/baanerp/tc/mcs/tcmcs0136s000" role="session">Tax Codes by Country (tcmcs0136s000)</GUIRef>
         </ListItemHead>
         <ListItem>Define and approve the exempt tax codes as described in <Link href="/baanerp/tc/onlinemanual/000441" role="manual">To set up tax codes by country</Link>. The tax rate must be zero percent. To print
		  a reference to the tax law on the invoices or purchase order acknowledgements,
		  link a text to the tax code.</ListItem>
         <ListItemHead>
            <GUIRef href="/baanerp/tc/mcs/tcmcs0105m000" role="session">Reasons (tcmcs0105m000)</GUIRef>
         </ListItemHead>
         <ListItem>Optionally define <GUIRef href="/baanerp/tc/domains/mcs.rstp#tax.exem" role="option">Tax Exemption</GUIRef> reasons. If you use a tax provider, you must define tax
		  exemption reasons. ERP Enterprise automatically prints the exempt reasons on the sales invoices.</ListItem>
         <ListItemHead>
            <GUIRef href="/baanerp/tc/tax/tctax0170m000" role="session">Company Sets (tctax0170m000)</GUIRef>
         </ListItemHead>
         <ListItem>Define one or a number of <Link href="/baanerp/tc/glossary/glossary#000420" role="glossary">financial company sets</Link>.</ListItem>
         <ListItemHead>
            <GUIRef href="/baanerp/tc/tax/tctax0171m000" role="session">Companies by Company Set (tctax0171m000)</GUIRef>
         </ListItemHead>
         <ListItem>
            <Paragraph>Add financial companies to the company set. Ensure that each
			 financial company belongs to only one financial company set. To set up tax
			 exemptions for a single financial company, create a company set that contains
			 only one company.</Paragraph>
         </ListItem>
         <ListItem> 
            <List>
               <ListIntro>For the financial company set, set up the tax exemptions
				in one of the following ways:</ListIntro>
               <ListItemHead>
                  <GUIRef href="/baanerp/tc/tax/tctax1100m000" role="session">Tax Exceptions by Country (tctax1100m000)</GUIRef>
               </ListItemHead>
               <ListItem>If the tax exemption applies to a specific state or
				province, you must use this session.</ListItem>
               <ListItemHead>
                  <GUIRef href="/baanerp/tc/tax/tctax1101m000" role="session">Tax Exceptions by Country Set (tctax1101m000)</GUIRef>
               </ListItemHead>
               <ListItem> 
                  <List>
                     <ListIntro>If the tax exemption applies to several countries, use
					 the <GUIRef href="/baanerp/tc/tax/tctax1101m000" role="session">Tax Exceptions by Country Set (tctax1101m000)</GUIRef> sessions.</ListIntro>
                     <ListItem>First, in the <GUIRef href="/baanerp/tc/tax/tctax0120m000" role="session">Country Sets (tctax0120m000)</GUIRef> session, define <Link href="/baanerp/tc/glossary/glossary#000350" role="glossary">tax country sets</Link> and in the <GUIRef href="/baanerp/tc/tax/tctax0121m000" role="session">Countries by Country Set (tctax0121m000)</GUIRef> session, add countries to the tax country
					 set.</ListItem>
                     <ListItem>Next, run the <GUIRef href="/baanerp/tc/tax/tctax1101m000" role="session">Tax Exceptions by Country Set (tctax1101m000)</GUIRef> session to set up tax exemptions for the
					 country set.</ListItem>
                  </List>
               </ListItem>
            </List>
         </ListItem>
         <ListItem> 
            <List>
               <ListTitle>Define the exemption</ListTitle>
               <ListIntro>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, enter the following
				details:</ListIntro>
               <ListItem>The sold-to or the buy-from business partner.</ListItem>
               <ListItem>Select the <GUIRef href="/baanerp/tc/tax/tctax1100m000#tctax100.exmt" role="manual">Exempt</GUIRef> check box or, in the <GUIRef href="/baanerp/tc/tax/tctax1100m000#tctax100.exmt" role="manual">Exempt</GUIRef> field, select <GUIRef href="/baanerp/tc/domains/yesno#yes" role="option">Yes</GUIRef>, as
				applicable.</ListItem>
               <ListItem>Enter the transaction details as applicable. If a detail is
				not relevant, leave the field empty.</ListItem>
               <ListItem>In the <GUIRef href="/baanerp/tc/tax/tctax1100m000#tctax100.ceno" role="manual">Exempt Certificate</GUIRef> field, you must enter the sold-to
				business partner's <Link href="/baanerp/tc/glossary/glossary#000332" role="glossary">tax exemption certificate</Link> or, for purchase orders, enter
				your own tax exemption certificate or direct pay certificate.</ListItem>
               <ListItem>In the <GUIRef href="/baanerp/tc/tax/tctax1100m000#tctax100.exrs" role="manual">Exempt Reason</GUIRef> field, enter the reason why the sold-to
				business partner or your own company is exempt from sales tax.</ListItem>
               <ListItem>In the <GUIRef href="/baanerp/tc/tax/tctax1100m000#tctax100.efdt" role="manual">Effective Date</GUIRef> and <GUIRef href="/baanerp/tc/tax/tctax1100m000#tctax100.exdt" role="manual">Expiry Date</GUIRef> fields, specify the period during which
				the tax exemption certificate is valid. Only one exempt reason and certificate
				number combination can be valid at a time. You can set up several tax exemption
				certificates with successive expiry dates for one exempt reason.</ListItem>
               <ListItem>To set up tax exemption for <GUIRef href="/baanerp/tc/domains/tax.oorg#purchase" role="option">Purchase</GUIRef> orders for a warehouse, specify the warehouse in
				the <GUIRef href="/baanerp/tc/tax/tctax1100m000#tctax100.cwar" role="manual">Warehouse</GUIRef> field. For the <GUIRef href="/baanerp/tc/domains/tax.src1#exemptions" role="option" Update="No">Exemptions</GUIRef> search orders, ERP Enterprise first checks
				whether you defined an exemption for the warehouse.</ListItem>
               <ListItem>If you use a tax provider, you can define exempt tax codes
				for purchases by country and state/province. Specify the state or province in
				which the goods are issued or delivered in the <GUIRef href="/baanerp/tc/tax/tctax1100m000#tctax100.stpf" role="manual">State / Province from</GUIRef> and the <GUIRef href="/baanerp/tc/tax/tctax1100m000#f.stpf.dsca" role="manual">State / Province from</GUIRef> fields.</ListItem>
            </List>
         </ListItem>
         <ListItem> 
            <List>
               <ListIntro>In the <GUIRef href="/baanerp/tc/tax/tctax0100m000" role="session">Tax Parameters (tctax0100m000)</GUIRef> session, select the following details:</ListIntro>
               <ListItemHead>
                  <GUIRef href="/baanerp/tc/tax/tctax0100m000#tctax000.telv" role="manual">Tax Exempt Level</GUIRef>
               </ListItemHead>
               <ListItem>
                  <GUIRef href="/baanerp/tc/domains/tax.telv#extended" role="option">Extended</GUIRef>, to indicate that you defined exempt tax codes
				for specific business partners and transactions details.</ListItem>
               <ListItemHead>
                  <GUIRef href="/baanerp/tc/tax/tctax0100m000#tctax000.sro1" role="manual" Update="No">Search Order</GUIRef>
               </ListItemHead>
               <ListItem> 
                  <List>
                     <ListIntro>Select one of the following values:</ListIntro>
                     <ListItem>In one of the <GUIRef href="/baanerp/tc/tax/tctax0100m000#tctax000.sro1" role="manual" Update="No">Search Order</GUIRef> fields, select <GUIRef href="/baanerp/tc/domains/tax.src1#exemptions" role="option">Exemptions by Country</GUIRef> or <GUIRef href="/baanerp/tc/domains/tax.src1#exemptions.set" role="option">Exemptions by Country Set</GUIRef>, as applicable.</ListItem>
                     <ListItem>If, in addition to the tax exemptions, you define tax
					 exceptions, you must also select <GUIRef href="/baanerp/tc/domains/tax.src1#exception" role="option">Exceptions by Country</GUIRef> or <GUIRef href="/baanerp/tc/domains/tax.src1#exception.set" role="option">Exceptions by Country Set</GUIRef> in a <GUIRef href="/baanerp/tc/tax/tctax0100m000#tctax000.sro1" role="manual" Update="No">Search Order</GUIRef> field.</ListItem>
                  </List>
               </ListItem>
            </List>
         </ListItem>
         <ListItem>Use the <GUIRef href="/baanerp/tc/tax/tctax8100m000" role="session">Test Tax Model (tctax8100m000)</GUIRef> session to test the resulting tax code and tax country
		  in various situations, and make the necessary adjustments.</ListItem>
      </ProcedureList>
   </GeneralSection>
   <RelatedTopics>
      <SectionTitle>Related topics</SectionTitle>
      <RelTopic>
         <Link href="/baanerp/tc/onlinemanual/000452" role="manual">To set up tax exemptions</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/tc/onlinemanual/000440" role="manual">To test the tax model</Link>
      </RelTopic>
   </RelatedTopics>
</ManualTopic>