By law, a customer in Italy can be exempted from value added tax in certain circumstances.

The tax authorities issue a license to the customer (Lettera di esenzione) with a license number and the date on which the license is valid. The customer sends this license to a vendor, who must take the tax exemption into account when carrying out invoicing. During the validity period of the license the vendor cannot add any tax to the customer invoice. The vendor must also log all tax exemption licenses encountered during the course of the business year. The date of logging as well as a business year-dependent serial log number must be defined for the tax exemption license. The vendor must also enter the license number and the date of tax exemption as well as the log number and the log date in every customer invoice.

Currently, the following two forms of license validity are supported:

1. Valid for a certain period of time
2. Valid for a transaction

You can control the Lettera di esenzione using the condition technique. You can control the Italian tax license by condition type LCIT.

You enter the license data in the condition master record screen.

Pricing takes into account whether or not the order of billing document created is exempt from VAT.

The preconditions for this are the following changes in Customizing, which are already maintained in the pricing procedure for Italy RVAAIT.