Defining Withholding Tax Types and Withholding Tax Codes 

Use

Define all types and codes that you require for the countries whose company codes you wish to change over to extended withholding tax.

Note that when you convert the withholding tax data, you must assign a withholding tax type and a withholding tax code for extended withholding tax to each withholding tax code for classic withholding tax (see Assigning Withholding Tax Codes and Withholding Tax Types). This enables you to assign several different withholding tax codes for classic withholding tax to one withholding tax type, as long as the following settings for the withholding tax codes for classic withholding tax are the same:

SAP recommends assigning withholding tax codes for classic withholding tax where the above settings are the same to the same withholding tax type for extended withholding tax.

If, in the future, you want to post several kinds of withholding tax in one document, you need several withholding tax types.

If you require functions that were previously not provided by classic withholding tax, but that are covered by extended withholding tax (for example, accumulation), after the withholding tax changeover, you must define a new withholding tax type for each function required.

Procedure

Defining withholding tax types (required)

  1. In the Implementation Guide for Financial Accounting, choose Financial Accounting Global Settings à Withholding Tax à Extended Withholding Tax à Calculation à Withholding Tax Types à Define Withholding Tax Type for Payment Posting.
  2. Define the required extended withholding tax types as described in the table below, otherwise the system cannot assign them to the corresponding classic withholding tax codes.

Screen area

Select...

If...

Calculation/Base amount

Net amount

Net base for tax contributions is selected in the corresponding classic withholding tax code

 

Gross amount

Net base for tax contributions is not selected in the corresponding classic withholding tax code

Calculation/Rounding rules

W/tax comm. round

 

Calculation/Cash discount

C/disc. pre W/tax

 

Calculation

Post w/tax amount

The flag Posting on payment is selected in the corresponding classic withholding tax code

Accumulation type

No accumulation

 

Control data

W/tax base manual

No cert. numbering

 

Definition minimum/maximum amounts
Base amount



W/tax code level

 

Definition minimum/maximum amounts
Withholding tax amount



W/tax code level

 

Central Invoice

No centr. invoice

 

Minimum check

Minimum check at item level

 

or Minimum base amount check

No check on min. base amnt at doc. level

 

Do not select any other fields in the withholding tax type.

Defining withholding tax codes (required)

  1. In the Implementation Guide for Financial Accounting, choose Financial Accounting Global Settings à Withholding Tax à Extended Withholding Tax à Calculation à Withholding Tax Codes à Define Withholding Tax Codes.
  2. Define the required extended withholding tax codes as described in the table below, otherwise the system cannot assign them to the corresponding classic withholding tax codes.

Screen area

Field

Must contain...

General data

Off. w/tax key

The value of the Withholding tax code field from the corresponding classic withholding tax code.

Base amount

Percentage subject to tax

The value of the same field from the corresponding classic withholding tax code.

Posting

Post. indic.

The value 1

Calculation

With/tax rate

The value of the same field from the corresponding classic withholding tax code.

 

W. tax. form.

Select this field if the same field is selected in the corresponding classic withholding tax code.

Reporting information

Region

The value of the same field from the corresponding classic withholding tax code.

 

Prov. tax code

The value of the same field from the corresponding classic withholding tax code.

 

Income type

The value of the same field from the corresponding classic withholding tax code.

If, in classic withholding tax, you have made an entry in the field Reduced rate in the withholding tax code, you must define this information in the vendor master record in extended withholding tax.

Make the required Customizing settings after the withholding tax changeover.

For more information about the system settings required for withholding tax exemption, see Carrying Out Postprocessing for the Withholding Tax Data Conversion

.

If, after the changeover, you wish to post withholding tax with reunification tax, note that reunification tax is not explicitly defined in the extended withholding tax function, but can be reflected by a separate withholding tax type.

Make the required Customizing settings after the withholding tax changeover.

For more information about the system settings required for withholding tax with reunification tax, see Carrying Out Postprocessing of the Withholding Tax Data Conversion

.