Extended Withholding tax configuration (1)

Extended Withholding tax configuration(1)

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Unformatted text preview: ........................................... 35 2.4.1 Define Min/Max Amounts for Withholding Tax Types ................ 35 2.2.2 Define Min/Max Amounts for Withholding Tax Codes................ 36 3. Company Code.......................................................................................... 38 3.1 Assign Withholding Tax Types to Company Codes ............................ 38 3.2 Activate Extended Withholding Tax........................................................ 40 4. Postings ...................................................................................................... 41 4.1 Define Accounts for Withholding Tax to be Paid Over........................ 41 5. Generic Withholding Tax Reporting ....................................................... 43 5.1 Define Output Groups ............................................................................... 43 5.2 Define Forms for Withholding Tax Reporting ........................................ 44 5.3 Define Certificate Numbering for Extended Withholding Tax............. 46 6. Vendor Master Data Maintenance.......................................................... 48 6.1 Update withholding tax codes in the vendor master............................ 48 6.2 Change Field Status used in the down payment account.................. 51 7. Go live checks when uploading Vendor Master Data and Vendor open items.................................................................................................. 57 www.sapficoconsultant.com Page 3 of 57 INTRODUCTION Withholding tax is applicable in few countries. Some of the countries which have withholding tax are United Kingdom, Slovakia, Turkey, Argentina, Brazil, Chile, Colombia, Mexico, India, Philippines , Thailand and South Korea. 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 date...
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This note was uploaded on 11/07/2012 for the course SCIENCE 102 taught by Professor As during the Spring '12 term at Granite State College.

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