Classic Withholding Tax and Extended Withholding Tax

Hi,
What is the difference between Classic Withholding Tax and Extended Withholding Tax.
Regards
RKG.

Hi
Withholding tax is calculated and posted to the appropriate withholding tax accounts at different stages, depending on the legal requirements in each country. As a rule, withholding tax is posted at the same time that the payment is posted, in other words the outgoing payment (Accounts Payable) or incoming payment (Accounts Receivable), is reduced by the withholding tax amount. 
In certain countries, such as Brazil, the Philippines, and Spain, withholding tax can or must be posted when the invoice is posted. This means that the amount receivable or payable is reduced by the withholding tax amount.
Extended withholding tax supports both concepts. 
The key concept in extended withholding tax is the distinction between withholding tax type and withholding tax code. While withholding tax types represent basic calculation rules, specific features of these rules - in particular the percentage rate -
are represented by the withholding tax code. You can define any number of withholding tax codes for a given withholding tax type.
If a particular transaction requires more than one kind of withholding tax, this is covered in the SAP System by defining more than one withholding tax type.
When entering a line item, you can enter withholding tax data for each of these withholding tax types.
How To Configure Withholding Tax?
Steps for extended withholding tax :
1. Check withholding tax countries
2. Define Ex. Withholding tax types for invoice postings
3. Define Ex. Withholding tax codes
4. Formula for Ex. Withholding tax calculation
5. Assign Ex. Withholding tax types to Company code
6. Activate Ex. Withholding tax
8. Create a G/L a/C for Ex. Withholding tax
9. Define A/C for Ex. Withholding tax (DBWW)
10. Make changes in Vendor master (XK02)
11. Maintain Company Code Settings:
Path: IMG -> Logistic -> General -> Taxes on goods movement -> India -> Maintain company code settings
12. Activate country version for specific fiscal year position
Path: IMG -> FA -> -> **** -> Taxes on sales purchases -> Basic Setting -> India -> Activate country specific for fiscal year position
http://help.sap.com/saphelp_erp2005/helpdata/en/e5/0780914acd11d182b90000e829fbfe/content.htm
nagesh

Similar Messages

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    Hi,
    Can anybody explain me what is the differance between classic and extended withholding tax.
    Rds,
    javed

    Hi
    Text from SAP documentation
    SAP provides you with two procedures for processing withholding tax:
    "Standard" and extended withholding tax.
    "Standard" withholding tax is the procedure that has always been supported by the system. It offers you the following features:
    Withholding tax for accounts payable
    Withholding tax calculation during payment
    Withholding tax code per vendor line item
    Extended withholding tax provides the following additional features:
    Multiple withholding taxes per customer or vendor line item
    Withholding tax calculation for partial payments
    Thank You,

  • What is the difference between Classic and Extended Withholding Tax

    Hi,
    Can some please tell me what is the difference between Classic Withholding and Extended Withholding Tax. How can I look at the Withholding Tax deducted from a particular invoice?
    Number Guaranteed.
    Thanks.

    Dear Prem,
    Withholding tax is the basically a tax withheld during the Vendor payment. So when making the payment to vendor the amount will be deduct (i.e withheld tax)
    from the invoice and paid. The customer is actually the tax to tax authorities.
    you can visit for more info.
    Withholding Tax
    For the config steps you go to the IMG path FI > Financila accounting for the Global settings > Withholding Tax
    Withholding tax configuration is done by FI person.
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    Prem

  • Defination of Classic and Extended Withholding Tax

    Hi Gurus,
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    Thanks in advance.
    Regards,
    Dev Mahendra

    hello,
    "Standard" withholding tax is the procedure that has always been supported by the system. It offers you the following features:
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        Withholding tax calculation during payment
        Withholding tax code per vendor line item
    Extended withholding tax provides the following additional features:
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       Withholding tax calculation for partial payments
    Regards,
    Sankar

  • Diference between Service tax and GTA service tax

    Hi,
    Kindly tell me what is the difference between service tax and GTA service tax and their accounting entries in SAP ?
    With Regards,
    Samrat

    Hi,
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  • Issue with Cross-Company code transactions and Extended Withholding tax

    Hi Gurus,
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    In the 2 company codes, one company code is setup for Withholding tax and other was not set.
    While posting in FB50, I am getting the below message and system does not allow to post the invoice.
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    You are entering a document containing at least one vendor or customer item and which has line items in several company codes. The extended withholding tax treatment has been set to active in one of these company codes, but not in one of the other company codes.
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    JBC.

    Hi Mamta,
    Thanks for the Response. I think you misunderstood my scenario.
    For Eg in FB60 with Co code 5065:
    I am debiting the Expenses for Co Code 1000(Witholding tax not active) and crediting the Bank Account of Co Code 5065(Withholding tax setup is done for this co code). When I tried to post with these line items I have getting the error.
    Posting        GL                   Co Code
    Dr          106520(Exp)            1000
    Cr          202020(Bank)           5065
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    I want to know whether is this a right way to solve this issue and will it impact on any other areas by only activating the Withholding tax for a Co code?
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  • Gross up Taxes and NICs together(taxes+NICs)

    s there any way you can Gross up both Taxes and NIC together? How do I go about this? Any step by step procedure or SAP note about this?

    ok

  • What input tax and out put tax

    hi difference between in and out put tax

    Hi
    see the below site
    http://help.sap.com/saphelp_erp2005vp/helpdata/en/e5/077dd14acd11d182b90000e829fbfe/frameset.htm
    nagesh

  • Extended withholding tax - US  Error 7Q 301 updating withholding tax

    Cannot get the system to allow me to change the withholding tax information on the accounting documents.  Extended withholding tax has been configured. The fields in the line items have been opened to allow changes to the withholding tax data, both for K and S.  The venodor has been updated for the withholding tax type and code. Program RFWT0010 does not update any records.  The funny thing is it works in the sandbox but not the regular testing dev client.  I have compared config and it is the same in both places.   Any ideas?
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    Hi,
    Please refer to note 363650, you will see the following information;
    C) Change Rules for classical and extended withholding tax If the withholding tax base amount should be changed after a
          docment has been paid already, the following steps are required:
    For Classical Withholding Tax and only if the withholding tax amount is zero.
    Change of withholding tax base amount or withholding tax code of a cleared invoice.
    If the withholding tax base amount and/or the withholding tax code needs to be changed after an invoice has been cleared please follow steps;
    As you see from the above information the following quotation "only if the withholding tax amount is zero".  Is this the case in your scenario?
    If a withholding tax amount other than zero has been posted, you cannot change the values via transaction FB02.
    Please also review the IMG documentation for transaction OB32 via spro -> Financial accounting -> Financial accounting global settings -> Document -> Line item -> Document change rules, line item. here you will see the following information;
    Document Change Rules, Line Item
    In this activity, you determine under which circumstances fields within posted documents can be changed.
    Note
    For a number of fields, the system itself determines that they can no longer be changed after posting. This includes all fields which are central to the principles of orderly accounting, for example, the amount posted and the account.
    The system also prevents the update objects from being changed in documents which have already been posted, independent of the document change rules
    Thus as you can see from the above description if an amount has been posted to the account you cannot change the fields despite entering in the field in OB32 as changable.
    Please also be aware that the important table concerning extended withholding tax is WITH_ITEM.  This is where the data found through the button  'Withholding tax Information' in FB03 is held.
    (For example in the 'Withholding tax data button' If you click on the help of the field Withholding Code and select the button 'Technical information' you will see that the field name is WT_WITHCD) The fields concerned with same
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    Regards
    Ravinagh Boni

  • Suitable BAPI for extended withholding tax

    we are migrating from classic withholding tax to extended withholding tax for which we are modifying all the programs which were using MRHR (invoice) in the background, since MRHR will be replaced by MIRO in extended withholding tax, in this process when we are trying to modify one program, we could not record MIRO, hence  our technical team suggested for use of BAPI functional module, kindly anybody suggest me which is the suitable BAPI for posting of invocie verification.
    Thanx in advance.
    Krishna

    Hi Krishna,
    Please check BAPI_INCOMINGINVOICE_CREATE and let me know.
    Assign points if it useful.
    Regards
    Ravinagh Boni

  • MIgration to Extended withholding tax

    HI Gurus,
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    Runtime Error          SAPSQL_ARRAY_INSERT_DUPREC
    Except.                CX_SY_OPEN_SQL_DB
    Date and Time          08/22/2009 18:01:37
    ShrtText
    The ABAP/4 Open SQL array insert results in duplicate database records.
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    Error in ABAP application program.
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    An exception occurred. This exception is dealt with in more detail below
    . The exception, which is assigned to the class 'CX_SY_OPEN_SQL_DB', was
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    "INSERT_WITH_ITEM" "(FORM)"
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    |     to occur, the running program was terminated.                                               
    |    The reason for the exception is:                                                           
    If you use an ABAP/4 Open SQL array insert to insert a record in
    the database and that record already exists with the same key,
    this results in a termination.
    |    (With an ABAP/4 Open SQL single record insert in the same error                              
    |    situation, processing does not terminate, but SY-SUBRC is set to 4.)   
    i observed that the WITH_ITEM table is updated with some documents where the company code is not filled in.
    can any body let me know the why and what could be the possible resaon for this.
    thanks in advance,
    anand k bagavatula
    Edited by: Anand K Bagavatula on Aug 29, 2009 5:38 AM

    Hi All,
    Nobody has not answered my issue.
    Otherwise anybody can explain in detail about " MIGRATION PROGRAMME " ( J1INMIG ).
    I want details about this last T.Code only i.e. J1INMIG and remaining all the necessary steps I completed.
    An early reply will be highly appriciated.
    Regards,
    K. S. Sai Kumar

  • Withholding tax settings(not extended withholding tax)

    Hi,
    I am working on withholding tax(not extended withholding tax). Previously we have one company code for that we created withholding tax and withholding tax codes. Now we are going to create another 2 new company codes. Now how to assign the withholding tax codes to the 2 new company codes.
    In extended i can assign withholding tax codes to company code but in withholding tax how i can assign withholding tax codes to the 2 new company code.
    Regards,
    Sankar

    Hi
    You can assign the same w tax code to another company code also,for that you go through this:
    Path: spro>financial global setting>Withholding tax> extended with holding tax
         Company code  Assign with holding tax types to company codes
    Path: spro>financial global setting>Withholding tax> extended with holding tax
         Company code  Activate extended with holding tax
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    If you have any doubt feel free to ask
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    Surya

  • Tax and W Tax tabs uneditable for fb60 transaction

    Dear All,
    I have a requirement to make the TAX and WITH HOlDING TAX TABS uneditable in FB60 transaction for specific company codes.
    Kindly guide, how this can be achieved.
    Thanks
    Vinda

    Hi:
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  • Service Tax and credit

    Hi Experts,
    Please Clear my confusion regarding the below points.....
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