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Function documentation Minimum Tax Base Locate the document in its SAP Library structure

Use

The Revenue Department does not require you to withhold tax on most business transactions worth less than THB 1,000. The SAP system handles this procedure automatically.

Note

There are one or two exceptions, for example, if you have a contract with a vendor, you always withhold tax, no matter what the withholding tax base is. Similarly, the minimum tax base does not apply to the one cycle gross up procedure.

Features

Before the SAP System withholds tax – either at invoice entry or payment entry – it checks whether the tax base is over the minimum amount.

Customizing

To activate the checks, make the following Customizing settings:

  1. Customize the withholding tax types for invoice entry.

    2. To do so, in Customizing for Financial Accounting (FI), choose Financial Accounting Global Settings ® Withholding Tax ® Extended Withholding Tax ® Calculation ® Withholding Tax Type ® Define Withholding Tax for Invoice Posting.

    In the Define Minimum/Maximum Amounts group box, specify that the system is to check the withholding tax base amounts and withholding tax amounts at tax code level.

  2. Customize the withholding tax types for payment entry.

    3. To do so, in Customizing for FI, choose Financial Accounting Global Settings ® Withholding Tax ® Extended Withholding Tax ® Calculation ® Withholding Tax Type ® Define Withholding Tax for Payment Posting.

    In the Define Minimum/Maximum Amounts group box, specify that the system is to check the withholding tax base amounts and withholding tax amounts at tax code level.

    In addition, select Min. Base Amt Check at Doc. Invoice Level.

  3. For each withholding tax code (for tax at invoice entry and payment entry), set the minimum tax base amount to THB 1,000.

To do so, in Customizing for FI, choose Financial Accounting Global Settings ® Withholding Tax ® Extended Withholding Tax ® Calculation ® Maximum and Minimum Amounts ® Define Max/Min Amounts for Withholding Tax Codes.

Caution

Define separate withholding tax types and withholding tax codes for any business transactions where you do not check the minimum base amount (see above).

Day-to-Day Activities

Assume you have a vendor to which you have assigned a withholding tax type for tax at invoice entry. When you enter an invoice from that vendor, the system applies the withholding tax type and checks the minimum base amount that you have assigned to the tax code, to see whether the withholding tax base is above THB 1,000. If so, the system calculates the tax as normal. If the tax base is less than THB 1,000, it does not.

Periodic Processing

When you make a payment, the system does not calculate any withholding tax if the payment is for less than THB 1,000. If you want to pay more than one invoice in a single payment, it is still the payment amount that counts as the withholding tax base.

Example

Assume you have two invoices from the same vendor, one worth THB 750 and the other worth THB 400. Both are due on the same day, so you make a single payment for both. Although both invoices are below THB 1,000 mark, the payment amount is over THB 1,000, so the system still withholds tax on the payment.

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