Use

You use this function to handle withholding taxes on payment transactions with your customers. The system automatically calculates taxes withheld by customers on payments to you and on payments that you make to customers (for example, for credit memos).

Activities

Customizing

Create the withholding tax types and codes that you need. Country Version Thailand comes with one sample tax type, R1.

Create a condition type for withholding tax, and add it to the appropriate pricing procedures.

Assign the condition type to the withholding tax type, in Customizing for Financial Accounting (FI), by choosing  Financial Accounting Global Settings Withholding Tax Extended Withholding Tax Calculation Withholding Tax Type Assign Condition Type to Withholding Tax Type .

Master Data

Add the withholding tax type to customer master record. Create a condition record for withholding tax.

Day-to-Day Activities

When you create a sales order, the system automatically links each line item to any withholding tax codes that are appropriate.

When you create a billing document for the sales order and release it to accounting, the system creates an accounting document with a customer line item as usual. The customer line item is assigned the appropriate withholding tax codes.

When you enter the incoming payment, the system automatically calculates the tax withheld by the customer and posts it to a separate account.