Inclusion of Tax Exemptions 
With the introduction of the flat withholding tax lawmakers have combined the exemption amount and income tax deductible expenses into the flat sum for savers. The maximum amount for singles is EUR 801 and the maximum amount for married couples filing jointly is EUR 1602.
The system includes the tax exemptions entered for the business partner when it calculates the flat withholding tax. This is done to reduce the taxable revenue. A business partner can have more than one tax exemption document, for example, an exemption application and a non-assessment certificate. You assign the tax exemption documents to the business assets or private assets of a business partner.
You can restrict the tax exemption documents to selected accounts. You can keep an account list for each tax exemption document pertaining to business assets. The system supplies historical data storage of tax exemption document including account lists.
Prerequisites
You have made all the relevant settings for your business processes for business partner classification in Customizing for AddOns by iBS – innovative Banking Solutions under
Settings for Capital Yield Tax 
Settings for Flat Withholding Tax Settings for Business Partner Classification 
.You have defined the relevant settings for the inclusion of tax exemption in Customizing for AddOns by iBS – innovative Banking Solutions under
Settings for Capital Yield Tax Settings for Flat Withholding Tax Settings for Tax Calculation Inclusion of Various Aspects of Tax Exemption .You have defined the following settings in the business partner data:
You have entered the tax exemption documents and non-assessment certificates relevant for inclusion in tax exemptions on the CYT-AGS Data tab page in the Tax Exemption Documents group box.
You have defined the business partner for the assignment of assets for revenue to be taxed in the future on the Control tab page in the Tax Parameters group box. If you have classified the business partner as a group, you also need to define an authorization group.
If the business partner is a group, you have entered the relevant business partner data on the CYT-AGS Data tab page in the Tax-Relevant Partner Data group box.
For more information, see Business Partner Data for Flat Withholding Tax.
Features
The system checks whether the Customizing settings and the business partner data relevant for tax exemptions exist. The processing of exemptions differs for tax exemption amounts and non-assessment certificates.
Note
You use report /IBS/MCY_MAN_STAMM_CORR to make backdated changes such as the creation or deletion of tax exemption documents.
Processing of exemption amounts
Processing depends on the type of turnover:
Revenues
The system calculates the amount that remains after the calculation of loss compensation according to the rules for capital yield tax.
Losses
The exemption application is restored after the system has performed the recalculation of withheld taxes. The system recreates used exemption amounts up to the maximum amount defined for the taxpayer.
Processing of non-assessment certificates
A non-assessment certificate means that either the entire revenue, or a share thereof, is not subject to taxation.
The following principles are valid for processing:
The system processes the tax amount based on the taxable amount and the relevant, reduced tax rate.
The system creates netting totals in the case of loss revenue. If there is revenue, the netting totals are used. For more information, see Loss Compensation.
The foreign withholding tax reported for revenue creates the respective netting total. When the non-assessment certificate is no longer valid, the netting total for foreign withholding tax is used.
In the case of loss revenue, tax is only recalculated if a non-assessment certificate did not previously exist.