Income Tax (ISLR) (Infotype 0399) 

Definition

Infotype 0399 is mandatory for all employees and enables you to enter the information required to calculate the Income Tax (ISLR) rate that must be deducted from the employee’s income in accordance with the information included in the Withholding Agent AR-I form.

Structure

This infotype has been designed in accordance with the AR-I form structure and consists of the following sections:

Basic Data

·         Taxable Year: this is the fiscal year or tax year to which the Income Tax (ISLR) return applies.

·         Period: field where you indicate the legal period in which the AR-I form (Withholding Agent) should be presented. During the taxable year there are five legal periods: the first corresponds to the initial delivery of the AR-I. The other periods correspond to the delivery of AR-I by variations in the initial data.

·         Maximum ISLR Percentage Indicator: This is a “check box” that you use to indicate that the company must deduct the maximum income tax (ISLR) percentage established. This applies to natural non-resident persons The maximum ISLR percentage value is a constant stored in the Payroll constants table (T511K-VETMP).

·         ISLR %: This field shows the tax rate calculated according to the information recorded in the infotype. This percentage will be discounted from all the taxable income tax (ISLR) items.

Remuneration and Tax Deductions

·         Remuneration: estimated income amount the employee is to receive from the company during the tax year.

·         Deduction: estimated amount of expenses the employee will incur during the tax year. This field has a selection button that enables you to choose between two options:

- One-off: if the employee chooses the one-off tax deduction type proposed by the infotype in accordance with the applicable legislation.

- Amount: if the employee states an estimated tax deduction amount.

Reductions

·         Family-related: number of people economically dependent on the employee.

·         Overtaxation: amount corresponding to the overtaxation of the employee in previous tax years.

Effected Remuneration and Withholdings

You use this section when the AR-I form corresponds to a modification of the previously made tax return. To calculate the new ISLR rate to be deducted from the employee’s income for the rest of the year, you must take into account the following fields:

·         Received Remuneration: total income paid to the employee from the start of the tax year up until the AR-I form modification date.

·         Withholding tax: total tax amount deducted from the employee from the start of the tax year up until the AR-I form modification date.

Additionally, the infotype contains a fast data entry screen that makes it easier to enter data, especially at the beginning of each tax period when there are many AR-I forms to be processed.

This component enables you to enter and process the data of many employees on the same screen in order to obtain the Income Tax (ISLR) rate to be deducted from the wages of the employees.