Extended Withholding Tax

Extended Withholding Tax

CONFIGURATION STEPS: I. BASIC SETTINGS Check Withholding Tax Countries (005Q)

Extended Withholding TaxGo to New entries and create

Extended Withholding Tax2. Define Withholding Tax Keys (059O)

Extended Withholding Tax4. Check Recipient Types (T059C)1.4 Check Recipient Types

IMG ----> Financial Accounting ----> Financial Accounting Global Settings ---->Withholding Tax ----> Extended Withholding Tax ----> Basic Settings ----> Check Recipient TypesCheck Recipient TypesThis is required to categorize the vendor.

For example:-If the vendor is a company or, Other than a company.

This configuration can be done after step number 2.1.2


1.5 Define Business Places

IMG ----> Financial Accounting ----> Financial Accounting Global Settings ----> Withholding Tax ----> Extended Withholding Tax ---->Basic Settings ----> India ----> Define Business Places

Business places are the location where tax is deducted. A company hasvarious offices at Head Office, Regional offices etc. Tax can be deducted at any of these places.

Withholding tax tracking is thus done based on businessplaces. The use of business places is mandatory.

Create a business place for each tax deduction account number (TAN) that your company has.

Extended Withholding TaxII. CALCULATION1. Define Withholding Tax Type for Invoice Posting (59PI)


2. Calculation

2.1 Withholding Tax Type

The withholding tax type controls the essential calculation options forextended withholding tax.

While the withholding tax code only controls the percentage rate of thewithholding tax.

You must enter the withholding tax type in the customer/vendor withholdingtax master data and in the company code master data.

2.1.1 Define Withholding Tax Type for Invoice Posting

IMG ----> Financial Accounting ----> Financial Accounting Global Settings ---->Withholding Tax ----> Extended Withholding Tax ----> Calculation of WithholdingTax Type ----> Define Withholding Tax Type for Invoice Posting

Here you define the withholding tax type for the posting at the time of enteringan invoice. This withholding tax type does not have any effect on thepayment.

All calculations for extended withholding tax are made in the first localcurrency of the respective company code.

Extended Withholding Tax2. Define Withholding Tax Type for Payment Posting (59PP)

Extended Withholding TaxAssign Factory Calendars to Business Places (J_1IEWTCALID)

Extended Withholding TaxAlternative Path to Define Business Places

Extended Withholding TaxIMG/Cross-Application Components/General Application Functions/Place of Business/Define Business Places

Extended Withholding TaxNow go to the below mentioned path and assign the Business Places against the Section Codes

Extended Withholding TaxGive Business Places and Save the data

Extended Withholding TaxWe need to give business place while creating vendor invoice.

Extended Withholding TaxMaintain Tax Due Dates (J_1IEWTDUEDATE)

Extended Withholding TaxII. CALCULATION

Extended Withholding TaxGive your country name and press Enter

Extended Withholding TaxSimilarly create Tax Type for Individual Assessee

Extended Withholding Tax3. Define Exchange Rate Type for Withholding Tax Type (CURR)

Extended Withholding Tax4. Define Rounding Rule for Withholding Tax Type (1RWT)

Extended Withholding TaxII.2. 1. WITHHOLDING TAX CODES

Extended Withholding TaxII. 2. 2. Define Formulas for Calculating Withholding Tax (59FBH)

II. 4. Minimum and Maximum Amounts

Extended Withholding TaxII. 4. 1. Define Min/Max Amounts for Withholding Tax Types (59M_T)

Extended Withholding TaxII. 2. 2. Define Min/Max Amounts for Withholding Tax Codes (59M_C)

Extended Withholding Tax3. 2. Activate Extended Withholding Tax (1EXT)

Extended Withholding Tax5. Generic Withholding Tax Reporting (ID01)5.1. Define Output Groups (ID01)

Extended Withholding TaxDC on STD for Withholding Tax Reports

Extended Withholding Tax5.2. Define Forms for Withholding Tax Reporting (FORM)

Extended Withholding TaxGive your Form IDWTCERT_UK_CIS23I and click on Display button

Extended Withholding Tax5.3. Define Certificate Numbering for Extended Withholding Tax (WTNR)

Extended Withholding Tax6. Vendor Master Data Maintenance

Extended Withholding Tax6.2. Change Field Status Used in the Down Payment AccountPath: OBYR

Extended Withholding TaxDouble click on A

Extended Withholding TaxGive your COA

Extended Withholding TaxTESTING IN EASY ACCESS


Questions?

In this path, the field Business Place is not available. Only Section code is available.We can create Section Code here.Go to the below mentioned path to create Business PlaceIMG/Cross-Application Components/General Application Functions/Place of Business/Define Business Places*Business Palces have been created for Steria Group

We can also define Business Places in the below mentioned path:Path: IMG/Financial Accounting/Financial Accounting Global Settings/Tax on Sales/Purchases/Basic Settings/South Korea/Business Places/Define Business Place

*Go to New EntriesHere we have to create Withholding Tax Types for Invoice Posting**K2 Surcharge @ 10% *K3 Education Cess @ 3% (Amount below Rs.10,00,000) *K4 Education Cess @ 3% (Amount above Rs.10,00,000) *Important Note: Summary of the Tax Types and Tax Codes*An Overview of WT Codes*Posting Indicator: 1 Standard posting: Bank/vendor/customer line item reduced2. Offsetting entry to G/L account ("grossing up")

3. Offsetting entry to G/L account

*You have to select the line and double click on Formulas for calculating withholding tax*Reduction of Base AmountAmount by which the base amount is to be reduced in order to determine the withholding tax amount by means of the withholding tax rate.

Decreased Reduction of Base AmountAmount by which the base amount is to be reduced with withholding tax exemption in order to determine the withholding tax amount by means of the decreased withholding tax rate.

*Similarly for Payment Tax codes*We can see the Withholding Tax Reports*Smart Form Model.**We will get the following Message once you press Ctrl+SDC on the Message to see the detailsNote:

After you have changed the relevant withholding tax types, you have to adjust the open items for the current relevant withholding tax types. For new withholding tax types, new withholding tax information has to be generated and for withholding tax types that are no longer relevant, the withholding tax code must be deleted in the existing withholding tax information.

You can use report RFWT0010 to adjust the withholding tax information to the relevant withholding tax types.

*

Documents

Extended Withholding Tax