Maintain Tax Codes
The system needs a withholding tax code in order to be able to determine the withholding tax. You specify the following for each code:
- The portion subject to tax
- The withholding tax minimum amount for Japanese withholding tax reporting
- The tax rate
Percentage rate which is to be used for the withholding tax base amount for calculating the withholding tax amount. You can also enter the reunification tax in percent in this field.
- The reduced withholding tax rate in the case of a valid exemption certificate
- The withholding tax formula
You only select the Withholding tax formula field if you require a special withholding tax calculation. In the USA, for example, different tax rates are used for 1042 reporting depending on the federal state in which the vendor is situated.
- Specifications for the withholding tax report in Spain (region, fiskalis provincial code and income type).
Withholding tax codes are dependent on the country.
Standard Settings
Withholding tax codes have already been defined in the standard system for countries where withholding tax is to be posted.
Activities
Check the list of standard withholding tax codes, and make corrections if necessary.
Further Notes
Do not change or delete any indicators and the accompanying definition if open items still exist for the indicator, otherwise errors will occur in the payment transaction.
The following settings must be made for 1042 reporting in the USA (withholding tax for foreign companies):
- The official withholding tax code as opposed to the withholding tax code is used for the output in the "Income Code" column.
- The portion subject to tax for determining the base amounts must always be 100% for the withholding tax codes for 1042.
- The tax rate is defined in the formula.
Program RFKQSU40 creates the necessary evaluations and forms for the 1042 procedure as well as a file for transferring to the tax authorities.
You will find further information in the
chapter 
Define special calculation types.