What is partly exempt organization in SAP PSM-FM - Funds Management?

SAP Term: partly exempt organization

• Component: PSM-FM

• Component Name: Funds Management

• Description: An organization that supplies goods or services that are both taxable and exempt. This means that it cannot normally reclaim all the value-added tax VAT on its purchases and that it must operate a partial exemption method to calculate how much VAT it can recover on its costs.

Smart SAP Assistant

• Key Concepts: 
  A partly exempt organization is an organization that is exempt from certain taxes, but not all taxes. In the context of SAP Funds Management (PSM-FM), a partly exempt organization is one that is exempt from certain taxes, such as Value Added Tax (VAT), but still has to pay other taxes, such as income tax. 
  
  How to use it: 
  In SAP Funds Management, a partly exempt organization can be identified by setting the “Partly Exempt” indicator in the master data of the organization. This indicator will then be used to determine which taxes should be applied to the organization’s transactions. 
  
  Tips & Tricks: 
  When setting up a partly exempt organization in SAP Funds Management, it is important to ensure that all relevant taxes are correctly identified and applied. This will ensure that the organization is not overpaying or underpaying any taxes. 
  
  Related Information: 
  For more information on setting up a partly exempt organization in SAP Funds Management, please refer to the official SAP documentation on the topic.