Sales tax and VAT terms for global finance teams
A comprehensive glossary of expert definitions and practical insights designed specifically for modern software and SaaS companies.
Whether you’re dealing with bundled transactions, trying to understand nexus thresholds, or managing cross-border digital service taxes, use this glossary to stay compliant and up to date while scaling globally.
Terms
Terms
Exemption certificate
The exemption certificate is the document that a purchaser provides to a retailer documenting the specific exemption they are claiming in order to make a tax free purchase. If a purchaser does not provide an exemption certificate at the time of purchase, the retailer must charge and remit sales tax. On audit a seller may be asked to provide copies of exemption certificates to support non-taxed sales.
The purchaser is responsible for determining whether they are making an exempt purchase and to properly complete the exemption certificate. The seller has the burden of proof to support any non-taxed exempt sales upon audit. Provided the seller has reviewed the exemption certificate to ensure it is property completed, they may accept the certificate in good faith from the purchaser.
Check out the Anrok guide on “Getting ready to charge sales tax” for best practices on incorporating exemption certificates for the first time.
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