Withholding Tax on Transfer of Profits Abroad (SAP Library

Withholding Tax on Transfer of Profits Abroad

Use

Under Section 70 bis of the Revenue Code, companies that transfer profits abroad must report the funds transfer to the Revenue Department and remit the appropriate amount of income tax within seven days. This applies, for example, to international companies with a subsidiary in Thailand, when the Thai subsidiary transfers profits to the group's headquarters in the United States.

You can use Country Version Thailand to print out these returns.

Activities

Customizing

Create an income type income type that denotes this sort of withholding tax. The income type must start 54—— for it to be recognized as such by the Generic Withholding Tax Reporting program. In Country Version Thailand, a sample income type is provided, 5402.

Create a withholding tax type and a withholding tax code for the transfer of profits abroad (none are provided with Country Version Thailand), and assign the income type to the withholding tax type.

Master Data

Create a vendor master record for the company code that you want to transfer the profits to and assign it the withholding tax type that you have defined.

Periodic Processing

The first step in the SAP System is to post the money from your bank account to the vendor. The system calculates and deducts withholding tax at the appropriate rate.

Then, to prepare the withholding tax return, execute the Generic Withholding Tax Reporting program and call the standard variant SAP&TH_CERTFOR. This standard variant prints out the tax returns on the Smart Form supplied with Country Version Thailand, IDWTCERT_TH_FRN.

Note

This return uses the same form as the withholding tax return for foreign companies. The form provided by the Revenue Department, Phaw Ngaw Daw 54, is used for both purposes. However, the Smart Form prints out the withholding tax items that have been assigned income types starting 54——.

Once you have called the standard variant, open the Forms box and choose Print Form 2 (Certificate for Foreigners). Then enter other data as required.

When you run the program in update mode, the program displays a dialog box, where you can enter the details of the tax that you want to remit to the Revenue Department (see Remitting Withholding Tax). If you do not want to remit the tax at this moment, choose This graphic is explained in the accompanying text .

The system automatically prints the returns in the approved format. Your own company's details appear in the header. Below that, it prints out the details of the company that you have transferred the money to.

In the bottom half of the form is a box where the system prints out the withholding tax base amount, the tax amount, and the payment date.