Tax exemptions

Differences between Infor LN FP2 and Infor LN FP3.

Tax exemptions

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.

Some enterprises are exempt from sales tax within the jurisdiction of certain tax authorities. Invoices for sales to a customer with a valid tax exemption must have zero tax amounts. If you are exempt from sales tax, your suppliers must not include the tax amount on their invoices.

Infor LN FP2

In Infor LN FP2 you set up tax exemptions in the following sessions:

  • Tax Exemptions for Sales (tcmcs1142m000)
  • Tax Exemptions for Purchase (tcmcs1560m000)
  • Register Warehouse for Tax Exemptions (tcmcs1561m000)
Infor LN FP3

In Infor LN FP3, you can define tax exemptions using the same sessions in which you define tax code exceptions. The separate Tax Exemption sessions are expired.

In addition, LN no longer supports transactions without a tax code. For tax exemption, you must define tax codes with zero tax rates in the Tax Codes by Country (tcmcs0136s000) session.

To support the new way to set up tax exemptions, the following changes were made:

  • Tax Parameters (tctax0100m000)

    In the new Tax Exempt Level field, you must select the tax exemption setup method, which can be Limited or Extended. Use Extended if you want to specify tax exemption certificates and exempt reasons.

    The number of Search Order fields was extended. The available search order options include tax exemption and, in addition, separate options represent exceptions and exemptions defined in the Tax Exceptions by Country (tctax1100m000) and the Tax Exceptions by Country Set (tctax1101m000) session.

  • Tax Handling (tctax0138m000)
    For the Limited tax exemption setup method, you can select the exempt tax code for the various tax order origins per country in this session. For orders for which you select the Tax Exempt check box in the order header, LN uses the exempt tax code.
  • Tax Exceptions by Country (tctax1100m000) and Tax Exceptions by Country Set (tctax1101m000)
    For the Extended tax exemption setup method, you can enter the transaction details of orders to which the exempt tax code applies as well as the business partner's exempt certificate and the exempt reason. Based on the transaction details, LN determines whether the exempt tax code applies to an order.
  • Tax Exemptions for Purchase (tcmcs1560m000)
    Use this session to link a text to the reason code for a purchase tax exemption for a tax code and country combination. LN prints the text on orders and invoices. In this way, you can link several tax exempt reasons with different texts to a single tax code by country combination.

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