How to Setup Tax Exemption in Ebusiness Tax for Suppliers.


How To Setup Tax Exemption In E-business Tax For Suppliers?

For certain Suppliers, the Tax Exempt classification should be set so that no tax is added to the AP invoice, during the validation/calculation of tax process.

The following provides step-by-step instructions on how to accomplish this.


    1) Navigate to Trading Community Manager Responsibitly > Trading Community: Administration >

    2) Click on "Create Class Category"
    3) Enter values for
        Class Category ::
        Class Category Meaning ::
        Class Category Description ::
        Delimiter :: leave it default
    4) Under "Assign Entities"
        Ensure that you select the default
        Select :: tick mark
        Table Name :: HZ_PARTIES
        Condition (Where Clause) :: WHERE PARTY_TYPE = 'ORGANIZATION'

    5) Click on "Apply and Create Class Codes"

    6) Enter values for the following
        Class Code :: for example "NO TAX"
        Meaning :: "NO TAX"
        Description :: No Tax for party X

   7) Click on Apply
   8) Click on compile

   9) Now Requery the class category ...

  10) You should see the associated class codes

  11) Navigate to Tax Managers Responsibility > Parties > Party Classification

  12) Create

  13)  Provide the following values
        Party Classification ::
        Fiscal Classification Type Code ::
        Name ::
        Effective From ::

   14) Under the "Associated Tax Regimes" region
        Regime Code ::
        Name ::
        Effective From ::
    Apply & save

   15)  Navigate to Tax Managers Responsibility > Parties > Party Tax Profiles

   16)  Query for Party Type :: Third Party
        Party Name :: X
        Click on update tax profile
        Ensure that the "Allow Tax Applicability" is not enabled

   17) Click on Classifications Tab
        For Fiscal Classification Type Code ::
        Fiscal Classification Code :: NO TAX
        Fiscal Classification Name :: NO TAX
        Effective From ::
    Click on Apply

  18) Navigate to Tax Managers Responsibility > Advanced Setup Options > Tax Determining Factor Sets
    Click on Create
    Enter the following values
        Tax Determining Factor Set ::
        Name ::
        Ledger ::
        Regime Code ::
        Determining Factor Class :: Party Fiscal Classification
        Class Qualifier :: Ship from Party
        Determining Factor Name ::
    Click on Apply

19)  Navigate to Tax Managers Responsibility > Advanced Setup Options > Tax Condition Sets
    Click on Create
        Enter values for
        Tax Condition Set ::
        Name ::
        Determining Factor Set::
        Country Name:: United States
    Click on Continue
    Enter value for
        Value/From Range ::NO TAX
    Click on Finish
20)  Navigate to Tax Managers Responsibility >Tax Configuration > Tax Rules
    Create a "Determine Tax Applicability" Rule using the previously created Tax Determining Factor Set & Tax Condition Set
    Ensure that when you create this rule set the applicability to "Not Applicable"
    Bounce the Apache Server
    Create a new invoice to the supplier 'X'
    Click "Calculate Tax" no tax gets calculated

Please note that ...the above steps are done so that system does not calculate tax on a particular party (supplier) automatically....but still if user needs to have tax for this invoice...they can create a manual
tax line