# Tax Exceptions

TAKU Retail's feature for creating tax rules allows you to automatically apply taxes to your sales. This guide will show you how to step up a tax rule to offer tax exemptions or tax rebates.

In order to create tax exceptions, you must first create a new tax rule. Please follow the [Creating Tax Rules](/how-to-get-started/general-settings/taxes/creating-tax-rules.md) guide to create a new tax rule.  

### Creating Tax Exemptions

To create a tax exemption, enter the rule name for your tax in the **Rule Name** field and select the sales tax you would like to apply the tax exemption to from the drop down menu in the **Tax Name** field. You will only be able to select active sales taxes while the rest will be locked. 

Enter the tax rate in a percentage that you wish to exempt in the **Tax Rate** field.

![](/files/-MkJWdc5K2-2csO4brfl)

You must enter the country, postal/ZIP code, region, and/or cities that this tax exemption is applicable in.

![](/files/-MkJXRl_qmT9MOqtBYgy)

Under the Others section, select **Exempt** from the drop down menu in the **Tax Calculation Type** field. It is optional to set a rule priority if there are multiple tax rules applied to the same sales tax. 0 is the highest priority meaning it is applied first and 1 is applied after and so forth. 

![](/files/-MkJXzEnSvXcg0vt_2zE)

### Creating Tax Rebates

To create a tax rebate, you must follow the instructions above, however, select **Rebate in** the **Tax Calculation Typ**e field.

1. Create a new tax rule following the instructions from the Creating a Tax Rule guide.
2. Enter the name of the tax rule.
3. Select the Sales Tax this rule will be applied too.
4. Enter the tax rate that you wish to give as a rebate.
5. Enter geographic region this tax rebate is applicable in.
6. Select the tax categories this tax rule applies too.
7. Under the Others section select Rebate as the Tax Calculation Type and set a Tax Rule Priority if applicable.

![](/files/-MkJazJwpE_ePqDEyo7w)

Note: Tax exemptions can be assigned individuals, groups, companies, or products. Refer to the [Creating Tax Categories](/how-to-get-started/general-settings/taxes/creating-tax-categories.md) guide for more information on setting up tax categories.


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