Zero tax amount

Zero rate tax codes

Taxable transactions on which no tax must be paid are considered as transactions with a zero tax rate rather than as non-taxable transactions. For such transactions, you must set up tax codes with zero rates.

Tax exemption can apply, for example, for the following reasons:

• The goods or services are not taxable.
• The goods transfer to or from specific countries is not taxable
• The transactions are related to service operations in specific situations.
• The business partner holds an exempt certificate.

Usually, if no tax is levied on a transaction, some additional information, such as a reference to the tax law that states the exception, or the business partner's tax exemption certificate number, must be printed on the invoice. Depending on the type of tax, you can use a reason code linked to the tax code or you can link a text to the tax code to contain this information.