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 Setting Withholding Tax to Active or Inactive

Use

When you are selecting open items for which withholding tax is to be deducted at incoming or outgoing payment, you can use the indicators WT Incoming Payment and WT Outgoing Payment in the lower section of the editing screen. This controls whether the withholding tax is to be applied to incoming or outgoing payments.

Prerequisites

Withholding tax retention is to be applied to the selected items.

Features

If you highlight the field WT Outgoing Payment , the company will retain withholding tax at clearing.

You are not permitted to retain withholding tax in the case of certain clearing procedures that are not linked to a payment, such as write-offs and transfer postings. In such cases you may not flag the field.

If you highlight the field WT Incoming Payment , the business partner will retain withholding tax. There are statistical credit items in the outgoing invoice for the amount of withholding tax the business partner is expected to retain. If the business partner retains less than expected, you have to clear the remaining credit amount separately at a later date.

A business partner account reports an invoice for 100 UNI and proportionate withholding tax credit for -10 UNI as an open item. The customer does not pay 90 UNI as expected, but rather 92. Proceed as follows:

  1. Set the invoice for 100 UNI to active. In the withholding tax credit memo, enter –8 UNI as clearing amount.

  2. Post the payment and then carry out account maintenance in a second step.

  3. Set the remaining –2 UNI of the withholding tax credit memo to active. Deselect the field WT Incoming Payment and post the clearing.