2/27/2018 Withholding tax calculation with FORMULA - ERP Financials - SCN Wiki

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ERP Financials / … / Accounts Payable - Withholding Tax

Withholding tax calculation with FORMULA

Created by MAURIZIO BIANCOTTI, last modified on Nov 23, 2010

WT FORMULA
Usually You define a WT code and You link it to a "Percentage subjected to tax" and to a "With/tax rate".

But if You need to define formulas (scales) for calculating withholding tax, than You will link Your relevant WT code to a specific Formula.

First You have to define the WT code and switch on the flag W.tax form ( Technical field V_T059Z-XQFOR).

To define withholding tax codes, You have to run transaction spro and following the path:
IMG --> Extended Withholding Tax à Calculation à Withholding Tax Codes
--> Define Withholding Tax Codes

Then You have to create the Formula by IMG--> Define Formulas for Calculating Withholding Tax

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2/27/2018 Withholding tax calculation with FORMULA - ERP Financials - SCN Wiki

Here you have to insert:

1. Validity date;

2. Currency of the Company Code;

3. Amounts, percentages and Reductions (optional);

Example of WT calculation with Formula:

In case of an amount of 12.000 as WT base amount, the above reported Formula will work in this way:

3.000 x 15% + 10.000 x 22% + 12.000 x 34% = 6.730.

In case of reduction base amount, the Formula will work in this way:

3.000 x 15% + 10.000-3.000 x 22% + 12.000 – 10.000 x 34% = 2.670

Remind:

If You fill the second Country field (Technical field V_T059FB-QLAND) then You must fill the Country field into the Vendor master data as well (technical field LFB1-QLAND). If not, the WT Formula will not
calculate the WT amounts.

Furthermore in order to use a formula for calculating withholding tax, you must enter the national currency in the Currency key field of the relevant company code.
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