Withholding Tax Settlements

In Kuwait, a 15% withholding tax is levied on dividends distributed to shareholders by fund managers, investment custodians and corporate bodies. This tax is withheld and settled by the dividend paying company. As the dividend paying company, you are required to submit this payment to the tax authorities along with a settlement form notifying them of the:

Check number, amount, bank drawn on
Name of the shareholding body
Address of the shareholding body inside and outside Kuwait
Nationality of the shareholding body
Date of dividend
Profit value
Tax due

You use this report to generate the withholding tax settlement form. You can run the report at any time, as required by your dividend payment practices.

Note Note

Note that shareholders are treated as vendors in the system.

End of the note.

Prerequisites

You have made the settings described in Customizing for Statutory Reports
You have specified an entry for Kuwait in Customizing for Financial Accounting (New), under Financial Accounting Global Settings (New) Withholding Tax Extended Withholding Tax Basic Settings Basic Settings Check Withholding Tax Countries
You have specified an entry for Kuwait in Customizing for Financial Accounting (New), under Financial Accounting Global Settings (New) Withholding Tax Extended Withholding Tax Calculation Withholding Tax Type Define Withholding Tax Type for Invoice Posting
You have defined a new withholding tax code to be used for dividend withholding taxes in Kuwait in Customizing for Financial Accounting (New), under Financial Accounting Global Settings (New) Withholding Tax Extended Withholding Tax Withholding Tax Code Define Withholding Tax Codes
You have assigned the defined tax types to the relevant company codes in Customizing for Financial Accounting (New), under Financial Accounting Global Settings (New) Withholding Tax Extended Withholding Tax Company Code Assign Withholding Tax Types to Company Codes
You have activated extended withholding tax in Customizing for Financial Accounting (New), under Financial Accounting Global Settings (New) Withholding Tax Extended Withholding Tax Company Code Activate Extended Withholding Tax.
You have specified the accounts to which the withholding tax will be paid over in Customizing for Financial Accounting (New), under Financial Accounting Global Settings (New) Withholding Tax Extended Withholding Tax Posting Accounts for Withholding Tax Define Accounts for Withholding Tax to be Paid Over
You have activated dividend withholding tax liability for the relevant vendors in the vendor master records on the SAP Easy Access screen, under Accounting Financial Accounting Accounts Payable Master Records Create (FK01) or Change (FK02)
You have enhanced the withholding tax data in the master records of the relevant vendors on the SAP Easy Access screen, under Accounting Financial Accounting Accounts Payable Master Records Change (FK02)

Specific Selections for Enhancing Vendor Master Records

On the display vendor screen, select the relevant vendor and company code, then select the checkbox for Withholding tax within Company code data and execute. On the subsequent screen, select the MENA Dividend button at the top and this will display the Company Code Data (Enhanced) screen.

If the vendor is a foreign shareholder (Non-Kuwaiti and Non-Gulf Cooperation Council (GCC) body), select the Foreign Shareholder checkbox. Leaving the box unchecked indicates the shareholder is a Kuwaiti or GCC body. In Share in Company, specify the vendor's share as a percentage. For example, if the vendor has a 5% share, then you input 5. Notes is an optional field and can be used to input a text description of the vendor. In the address field, if the shareholder is foreign then you indicate the shareholder's Kuwaiti address. If the shareholder is a Kuwaiti or GCC corporate body, then you have the option to specify a second address within Kuwait or you leave the entry blank.

Note Note

All of the above entries will appear in the settlement form. For example, any text entered in Notes will appear in the Notes section of the form sent to the tax authorities.

End of the note.

Features

This report includes the following features.

Selection

On the selection screen you enter the company code that is used to populate the form elements and then select the date as it should appear in the form. In Specific Selections, select the check number used for the payment of the withholding tax to the tax authorities. The Optional Parameters can be used to narrow down the list of selectable checks by limiting the range to those checks paid on behalf of foreign or Kuwaiti and Gulf corporate bodies, those falling in a specific date range, and by indicating whether the check was an external physical check or one generated internally by the system.

Note Note

If you select a form version that is not assigned to this report in the Customizing activity Assign PDF Forms to Reports then the results will be incorrect.

End of the note.

Activities

To access this report on the SAP Easy Access screen, choose Start of the navigation path Accounting Next navigation step Financial Accounting General Ledger Information System General Ledger Reports (New) Financial Statement / Cash Flow Kuwait Withholding Tax Settlement End of the navigation path , KW_DIVIDEND