You will not be able to enter one per line item, but you can split manually the total amount of the invoice and indicate different withholding tax codes even from the same withholding tax type to each split — i. No Account? Sign up. By signing in, you agree to our Terms of Use and Privacy Policy.
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Newsletter Topics Select minimum 1 topic. Tags: SAP Accounting. Christa01 November 24, 0 Comments. HI there, I have problems posting an invoice with different withholding tax on each line item. When your customer pays you, you enter the payment as normal. The system deducts the appropriate amount of withholding tax and sends you the remainder.
When you enter the payment in the system, the system automatically calculates how much tax the customer has withheld and posts this amount to a separate withholding tax account.
If you then have to create a credit memo for the customer, or any other form of reimbursement, the system automatically withholds tax on the payment that you make, using the withholding tax code that you have entered in the customer master record. Activities Customizing Create the withholding tax types and codes that you need.
No notes for slide. Withholding tax configuration 1. All rights reserved. No part of this e-book should be reproduced or transmitted in any form, or by any means, electronic or mechanical including photocopying, recording or by any information storage retrieval system without permission in writing from www. SAP AG is not the publisher of this e-book and is not responsible for it under any aspect.
Basic Settings Company Code Generic Withholding Tax Reporting Vendor Master Data Maintenance Go live checks when uploading Vendor Master Data and Vendor open items SAP has given an excellent solution to map the withholding tax scenario. What is a withholding tax? Withholding tax is an Income tax which is deducted at the source of the revenue.
The party that is subject to tax does not remit the withholding tax to the tax authorities himself. In any business transaction there are 2 parties involved. One is the customer and another is the vendor. A customer is authorized to deduct withholding tax for services rendered by the vendor. When the vendor raises the invoice on the customer, the customer deducts the withholding tax as per the rates specified by the tax authorities and pays the balance money to the vendor.
The tax deducted by the vendor is remitted to the tax authorities on specified due dates. The vendor gives a Withholding tax certificate to the customer for the withholding tax deducted. The customer can claim this withholding tax as advance income tax paid in his annual returns to Income tax authorities.
In some countries like India the withholding tax is deducted on Invoice or payment whichever is earlier. Thus when an advance is paid to the vendor the customer is required to deduct withholding tax on the advance payment. When the Vendor submits an Invoice the customer is now required to deduct tax on the Invoice amount reduced by the advance amount.
To calculate pay and report the withholding tax, the SAP system provides two functions:- Classic Withholding tax Extended Withholding tax Extended Withholding tax includes all the functions of classic withholding tax; SAP therefore recommends the use of extended withholding tax.
We will cover the Extended withholding tax functionality in this e-book. We will try to cover the broad configuration aspects of extended withholding tax, without getting into each country specifics. Since each country has its own forms and different reporting requirements. From the Accounts Payable perspective, the vendor is the person subject to tax and the company code is obligated to deduct withholding tax and pay to tax authorities.
From the Accounts Receivable perspective the company code itself is subject to tax and the customers that do business with the company deduct withholding tax and pay to the tax authorities. Generally the Accounts Payable perspective is used by majority of the implementing companies. Let us proceed for the configuration. Basic Settings 1. Click on Click on 6.
Here we configure the various tax keys which are applicable in different scenarios. Update the following:- 7. Its requirement of Government to deduct or withhold a particular percentage from paying to the vendor and pay such amount to the Government on behalf of other person. All the configurations for the Withholding Tax is done in the following Tab only:.
The flow for the configuration is such that firstly the Withholding Tax Key e. Define Withholding Tax Keys: Withholding Tax key is used to identify different withholding tax types. A name is to be given with the official key. Withholding Tax can be deducted at two point of time; it can be either at the time of invoice or at the time of payment. So for this Withholding tax types are to be created one for invoice and second for payment.
The withholding information is to be provided while posting for such document for Withholding Tax payment. For each Withholding Tax Type, according to the different rates available in the Income tax rates, the different Withholding Tax Codes are to be created based on the Withholding Tax Type.
Here above configuration is done and on the above basis the TDS amount will be deducted from the invoice or payment. Here we maintain the Document type for posting Challan. The number groups are assigned to number range and these number ranges are maintained for fiscal years which are consumed while challan posting.
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