Definition
A system object that you use to classify payment recipients according to their taxpayer status, for the purposes of withholding tax certificates.
Use
Customizing
Define the recipient types in Customizing for Financial Accounting (FI), by choosing Financial Accounting Global Settings ® Withholding Tax ® Extended Withholding Tax ® Basic Settings ® Check Recipient Types.
For income taxes, remittance tax, and stamp tax, the sample recipient types provided with Country Version Colombia reflect different categories of taxpayers – taxpayers and non-taxpayers; self-withholding agents; foreign taxpayers; and natural persons and legal persons.
For value-added tax (VAT) and industry and commerce tax, the sample recipient types are used to distinguish between the general and simplified tax systems, and between natural persons and legal persons.
Different recipient types are defined for different withholding tax types, to reflect the categories recognized on the withholding tax certificates.
Master Data
Enter the recipient type in each vendor master.
Day-to-Day Activities
Whenever you enter a document that includes a withholding tax item, the system automatically assigns the item a withholding tax code, as normal. Since each tax code is also associated with a recipient type, the withholding tax item is also automatically classified.
Periodic Processing
When you come to prepare withholding tax certificates, the system fills them out according to the recipient types that the withholding tax items are classified with.