What is exemption in SAP LOD-LH-TAX - SAP Localization Hub, Tax Service?

SAP Term: exemption

• Component: LOD-LH-TAX

• Component Name: SAP Localization Hub, Tax Service

• Description: The process of freeing a transaction or party from tax on a particular level, such as on federal, state, or local level. &EXAMPLE& In the United States, when a company sells a certain kind of goods to a business partner in a neighboring state, the business transaction can be exempt from local jurisdiction tax, but not from federal sales tax.

Smart SAP Assistant

• Key Concepts: 
  Exemption is a feature of the SAP Localization Hub, Tax Service that allows customers to exempt certain items from taxation. This feature is useful for businesses that need to exempt certain items from taxation due to legal or other reasons. 
  
  How to use it: 
  To use the exemption feature, customers must first configure the exemption rules in the SAP Localization Hub, Tax Service. This includes setting up the exemption criteria, such as the type of item being exempted and the applicable tax rate. Once configured, customers can then apply the exemption rules to specific items in their transactions. 
  
  Tips & Tricks: 
  It is important to ensure that all exemption rules are configured correctly before applying them to transactions. This will help ensure that all applicable taxes are correctly calculated and applied. Additionally, customers should regularly review their exemption rules to ensure they are up-to-date with any changes in taxation laws or regulations. 
  
  Related Information: 
  For more information on how to configure and use the exemption feature in SAP Localization Hub, Tax Service, please refer to the official documentation provided by SAP. Additionally, customers can contact their local SAP support team for assistance with configuring and using this feature.