Generate Withholding tax on interest Money Market instrument

How can I automatically generate a flow for withholding tax on the interest of a money market instrument (55B)? Would the tax be posted on a different (from the counterparty) business partner (tax office) or just an open item on a GL account?

Hi ,
As limitation with treasury module, we cant post direct to vendor Therefore you have to use derive flowfor generation of tds flow which can be post as a GL open item but this will not help you to run the With-holding tax cycle.
If you not required TDS challan, then above mention can help you but if you want to run complete TDS cycle then firstly you have to post the Gross Interest in Interest Payable and then with the help of FB01 transfer the Gross Interest to Vendor, while passing this entry system will give pop-up of with-holding tax assign in vendor after chossing the right section , system will automatic pass accounting entry of TDS.
Regards
Narinder Pal Verma

Similar Messages

Loans Management - Withholding Tax on Interest - Product type 33A

Dear Experts,
I´m trying to config the withholding tax on interest per product type 33A General Loan Given. Do you know which is the correct flow type to use and how to config and link it in order to set the base amount related to the interest calculated amount?
In my design is always a quarterly calculation for Intercompany loans and, in special case, I need to apply the WHT to the calculated amount of the interest.
Example:
Interest invoice : Flow Type 0110 A_Interest debit pos. rec.
01     Customer Affiliate         1000
50     P&L Interest                 1000
Interest invoice with 10% WHT
01     Customer Affiliate           900
40     WHT 10%                       10
50     P&L Interest                 1000
Thanks in advance for any helpful advice you could provide me.
Best regards
Paolo

Hi Feng,
are you sure it will work also for SAP Banking Loans Management? I read the attached documentation of WHT for India and every call-out is related to TRM.
May you please confirm me which flow type of loans management is covering this sub-process?
Thanks and regards
Paolo

Withholding tax for interest

Hey Gurus,
         It requirement for my client,we are running the F.26 Interest scale for customers find below the example in brief.........
         Client will receive security deposits from customers we treated this as a special GL for this we will pay the 7 % interest to the customer.
        If the interest amount is more than RS.5000 paying by the client we need to deduct WITHHOLDING TAX all the configuration has been done we are able to see the Base amount in customer line item but system is not calculating the WITHHOLDING TAX.
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Dear,
I recommend you check the tax categoty on the master data, check if there is an exemption data period, or if there is a monthly limit of accumulation in Customizing.
regards

Customizing SAP for non-standard money market instruments

Hi experts,
Would you know if SAP standard also provides for Pre-shipment loans, trust receipt, bill discount, bank guarantees and letter of credit? Will this be processed the same way as standard MM instruments? TM01/TMCA --> TBB1?
hope for your kind help.
Thanks,
David

Hi,
Nice to see a separate thread. Hope you will get required solution here.
In my opinion you can use the product type 55a (Interst rate instrument) for loans. For other requirement you might need to use the product type 56A (facilities) and link your products (many need to create similar to 55a for different purposes).
I don't have system handy to give you detailed steps. But I will try to update you asap if you wont get responses meanwhile.
thanks,
Kumar

Withholding tax amount is not updated in with_item table

Dear all,
In our system, one vendor invoice posted through FB60. In which, system generates withholding tax lin item. The same line item shows in BSIS and WITH_ITEM tables. It also shows in GL account line item display as open item. But, in WITH_ITEM table system not calcuate tax amount and shows as nil withholding tax amount against withholding tax base amount because of this I will get error at the time of creating challan through J1INCHLN.
Please help us though there is statutatory payment due date.
Regards,
Kalpik

Hi Raghvendra,
Thanks for reply. Why system is not update withholding tax amount only for that particular document ?
So, we can take precaution in future also.
Regards,
Kalpik

Withholding tax form BIR 2307 ---- very urgent

hi frnds
i want to generate withholding tax report in the BIR 2307 form but it just dums up the data but do not distribute to the related filed.
BIR 2307 for is SAP standard format for Phillipines withholdign tax reporting.
Can you please tell me the answer?
it is very urgent

Hi, sorry for late reply. Hopefully this help.
In Venezuela there are two types of tax numbers, registro identificación fiscal (RIF) and número
identificación tributaria (NIT). The NIT is gradually being superceded by the RIF, but both are still
in use. As a result, each business has an RIF, but may also have an NIT.
Customizing
You maintain your customers and vendors tax numbers in their master records, on the Control
data tab (customers) or on the Control data screen (vendors). You enter the RIF in Tax code 1,
and the NIT in Tax code 2. You maintain your own tax numbers in Customizing for
Financial Accounting, under Financial Accounting Global Settings Company Code Enter
Global Parameters.
Structure
The tax numbers are structured as follows:
NIT
A 10-digit number, for example, 1234567890.
RIF
In total, 12 characters long. The first character is E, I, J, or V, followed by a hyphen ,
followed by eight digits, followed by a hyphen, followed by another digit, for example,
V-12345678-0.z
Regarding VAT
The vendor master records is the one that determines whether or not a
Vendor is liable for value-added tax (VAT)
If vendor is liable for VAT, you select this checkbox in their master record.
Hope this help, and dont forget to assign points

Withholding tax on vendor advance

hi gurus,
we are facing one major problem, our company manufacturing cement. presently now our plant expansion work going on(WIP).
in this scenario we are facing TDS on Vendor advance.
for vendors we are issue the materials in lieu of Cash/Chq payment as a advance.
how to calculate the TDS on this scenario in SAP.
manually we are follow like this
for material issue
vendor a/c Dr 1000
To Material A/c 1000
for TDS
Vendor a/c Dr 23
   to TDS a/c 23
this is the procedure to follow the JV preparation.
how to solve this problem in SAP.
thanks in advance.
p.seshaiah

Hi,
Firstly you have to maintain the cofiguration for withholding tax
Kindly configure the TDS under mentioned path.
1. SPRO --> Financial Accounting (New) --> Financial Accounting Global Settings (New) --> Withholding Tax > Extended Withholding Tax>Calculation-->Withholding Tax Type
2. Similarly,for taxcodes follow the above path.----->Calculation--->Withholding Tax code
Here you can maintain your tax codes both at the time of making an advance as well as at the time of making an invoice.
These tax types alongwith the tax codes maintained will have to be maintained in the "Withholding Tax" tab in the Vendors Master. Please note you have to tick the checkbox "Liable" for the relevant tax codes.
3. For generating Remittance challans,the following steps need to be followed:
    SPRO-FA-****-WHT-EWT-Postings-India-Remittance challans-Specify document type
         i) Maintain number groups
        ii) Maintain Number ranges
        iii) Assign number ranges to number groups
4. For generating Withholding TAx certificates ,the following steps need to be followed:
    SPRO-FA-****-WHT-EWT-Postings-India-Withholding tax certificates for customers and vendors
        i) Maintain number groups
        ii) Maintain Number ranges
        iii) Assign number ranges to number groups
5. For challan updation use T code J1INCHLN
6. For bank updation use T code J1INBANK
7. For certificate print use T code JINCERT
8. for re-print use T-code J1INREP
9. To view the report for MIS use T code J1INMIS
Regards
Sonali T

VAT and Withholding tax setup for Philippine

Hi ,
Anyone is familiar with the VAT and Withholding tax setup for Philippine.
What is the VAT and WHT config in order to fuilfil the following example.
Appreciate if someone is able to provide me some help on this. Thank you.
Invoice Amount of P 1,120.00 gross of VAT
Services Sales to Private
ENTRY TO RECORD REVENUE          Debit     Credit
Accounts Receivable                                1,120.00
     Vat Consultancy Set-Up                               120.00
     Revenue                                                 1,000.00
ENTRY UPON COLLECTION
Cash in Bank                                                  1,100.00
Taxes Payable - BIR ITR                                 20.00
Vat Consultancy Set-up                               120.00
     VAT Consultancy Payable                               120.00
     Accounts Receivable                            1,120.00

Additional Information
Value Added Tax Reporting:
Advance Return for Tax on Sales/Purchases (VAT Reporting)
Use
In the Philippines, companies are required to submit Bureau of Internal Revenue (BIR) forms 2550M for the monthly (value-added tax) report and 2550Q for the quarterly VAT report. However, these forms also include information not provided by the SAP System, such as advance payments. Using the Advance Return for Tax on Sales and Purchases report, you can print the relevant VAT data and enter it in forms 2550M and 2550Q.
Integration
The report is based on the SAP List Viewer (ALV), which enables you to define your own display variants, according to the BIR requirements listed below.
Activities
To access the report, from the SAP Easy Access screen, choose Accounting --> Financial Accounting --> General Ledger --> Reporting --> Tax Reports --> General --> Advance Return for Tax on Sales/Purchases --> Advance Return for Tax on Sales/Purchases.
You need to make the following settings, in addition to your specific selection criteria:
Under                         Set the following indicator(s)
Output control                         Read address data
Output lists                         Output tax: Line items
                                            Input tax: Line items
You need to define your SAP List Viewer display variant to include the following data on the VAT report, as required by the BIR:
u2022     Reporting company's name and TIN
u2022     Vendor or customer name
u2022     Vendor or customer TIN
u2022     Vendor or customer address
u2022     Document date
u2022     Document number
u2022     Reference number
u2022     Invoice amount
u2022     VAT amount
Withholding tax reports
Generic Withholding Tax Reporting
Use
You use the Generic Withholding Tax Reporting tool to generate withholding tax data for withholding tax reports submitted to the Philippine Bureau of Internal Revenue (BIR) and vendor certificates, as follows:
u2022     BIR form 1601 u2013 Monthly Remittance Return of Income Taxes Withheld
u2022     BIR form 2307 u2013 Certificate of Creditable Tax Withheld at Source
u2022     BIR form 1604 u2013 Annual Information Return of Income Tax Withheld on Compensation, Expanded and Final Withholding Taxes
Features
SAP delivers standard report variants and Smart Forms for each of the reports and the certificate, which are listed below.
SAP also provides a display variant for the output lists, 1SAP, which you can specify under Output control and lists in the Display variant column.
BIR 1601
SAP provides withholding tax data for page 3 of the form. The form comprises three sections u2013 expanded withholding tax, final tax based on the regular rate, and final tax based on treaty rates. Within each of these sections, the data is summarized according to the nature of the income payment (ATC code). For more information, see Withholding Tax Code.
The predefined report variant for BIR 1601 is SAP&PH_1601, and the Smart Form is IDWTCERT_PH_1601.
BIR 2307
The predefined report variant for BIR 2307 is SAP&PH_2307, and the Smart Form is IDWTCERT_PH_2307.
BIR 1604
You use BIR form 1604 to report expanded and final withholding tax for all nonemployee transactions.
SAP provides the three required sections of form 1604: alphalists 3, 4 and 5 (schedules):
Section of BIR 1604 -DESCRIPTION - Predefined report variant - Smart Form
Alphalist 3     Payables subject to expanded withholding tax     SAP&PH_1604-3     IDWTCERT_PH_1604_SCHEDULE3
Alphalist 4     Payees subject to final withholding tax     SAP&PH_1604-4     IDWTCERT_PH_1604_SCHEDULE4
Alphalist 5     Other payees whose income payments are exempt from withholding tax issued but subject to income tax     SAP&PH_1604_5     IDWTCERT_PH_1604_SCHEDULE5
Prerequisites
For each withholding tax report, note the required Customizing settings for the corresponding output group.
Activities
To access the report, from the SAP Easy Access screen, choose Accounting --> Financial Accounting -->Accounts Receivable --> Withholding Tax --> Generic Withholding Tax Reporting.
The Generic Withholding Tax Report has several options for reporting.
The report can be run without the Output Group field populated, or it can be run with one of the PH1 to PH5 options as it relates to the reporting forms/requirements
Hope this piece of information is helpful to you.

Withholding tax for bank interests

Hi, Experts,
I'm facing the problem that the bank doesn't pay the total interests, they will deduct the withholding tax amount.
I've review the documents for SAP extended withholding tax function, found that it is only available for vendors and customers...
Does anyone know how to realize it in the SAP?
Or just have to manually record it through manual entry?
This happens for banks in Spain.
Many thanks.
Best regards,
Kelvin

Hi,
You have to create a customer a/c with bank name and maintain TDS codes in the master data. Pass below entry
Customer- A/c Dr
TDS Receivable A/c Dr
Int.recd A/c
After that, the will credit the int.in our books.
Bank A/c Dr
Customer A/c Cr
Regards,
Mukthar

Interest splitting method and self withholding tax......

hi all,
please let me know the concept for interest splitting method with examples and also self withholding tax.
thanks in advance

please update me for this issue.........

Exchange Rate Difference generated when process payment w/ withholding tax

I post a foreign currency vendor invoice w/ withholding tax posting
that is related to the expense transaction. We have assigned a
withholding tax type '01' for invoice posting (that means the
withholding tax calculated during invoice posting). And this
withholding tax amount is calculated using special exchange rate
announced by Bank of Thailand (BOT). And this posting is fine. e.g. Dr
Expense Cr Vendor Cr Withholding tax.. The withholding tax amount is
calculated based on BOT rate, Expense posting is based on M rate and
the AP posting is equal to Expense Posting minus withholding tax
posting..
Assume BOT Rate is 3:1 and M rate is 2:1
FC LC
Dr Expense 100 200
Cr Vendor 85 155
Cr WH Tax 15 45
When I process outgoing payment with foreign currency for this invoice,
system always take M rate (or I use special document type to force the
system use BOT rate), but either these two results will make the
posting imbalance in Local currency, then make posting to exchange
gain/loss..
How can this problem solved? Any configuration control? Or what we only
can do is to input the LC amount during payment posting..
Please advice.
Angus

Please check table V_T7XSSPERSUBTYP, where in the subtypes for specific countries / cities need to be maintained for different infotypes. In this case check for IT0210.
If helps, pl do reward.

Sap treasury withholding tax

Hi,
When i am trying to create TM01 - fixed deposit creation (nominal interest) - withholding tax is generated
When doing compound interest creation - no withholding tax is not generated?
What is the reason?
Any config changes need ?
TDS entries:
On Maturity or End of Financial Year, Whichever comes earlier.
Maturity
Bank Account                                                 DR
TDS on Interest/Advance Tax & Interest       DR
FDR Account                                                 CR
Interest receivables Account               CR

Krishna, check configuration here: SPRO -> Financial Supply Chain Management -> Treasury and Risk Management -> Transaction Manager -> Money Market -> Transaction Management -> Flow Types -> Derived Flows -> ...
Detailed description here: SAP Treasury - How to create taxes for Issuer
P.S. When you use compound interest - the original flow is being changed from 1200 Nominal interest to 1150 Interest capitalization. So, here tr. SM34 -> VC_TR_DERFLOWS_5 you have to add new original flow + your tax flow.

How to post gain/loss on exchange rate from Money Market

Dear Sap Expert,
     I need your kindly help about posting gain/loss in Treasury with money market type.
     My scenario use the product type 55A - Interest rate instrument and transaciton type = 200 borrowing in Foreign currency transaction as the transaction as belows,
Date                   Flow Type     Name                       Amouunt      currency     Exchange rate         Amt.Local currency
19.10.2011         1105             Borrowing               10,000            USD               30.00                       300,000
30.10.2011         1120             Final repayment       10,000            USD               30.00                      300,000
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    On 19.10.2011 I use t-code TBB1 to post the borrowing transaction (1105)
    On 30.10.2011 I use T-code TBB1 to post the Payment transaction but the gain/loss account does not happen.
    For my question Can the system post document for flow tpe 1120 (on 30.10.2011) with exchange rate realized gain/Loss automatically? or how should I do to make it correctly.
Thank you very much for your suggestion.
PK

Hi,
your customizing for Derived Business Transactions requires DBT_B flows in your PMP in order to post realized gains/losses.
Regards,
Lorenz

Qatar withholding tax

Hi folks,
I have a query regarding Qatar Withholding tax. In Qatar, withholding taxes are applicable at the time of invoice or payment?
For example, in India, the laws says tax should be deducted at the credit book entry or payment. So, withholding tax gets calcualted at advance payment as well as invoice .
Extra tax is reversed in downpayment clearing in f-54 transaction for India company codes.
Is it same in Qatar?
Thanks in advance.
Nishant

Hi
FI Global (New)>Withholding Tax>Extended Witholding Tax>C.Code>Assign Withholding Tax Types to C.Code
ensure here that respective withholding tax type which is assigned to company code under vendor data -- with/tax agent is ticked and validity period from and to are properly entered or not. Also ensure that vendor master contains withholding tax codes.
The new tax regime will see foreign investors pay only 10% tax from the current 35% whereas the oil and gas sector will continue to have a minimum tax of 35%.
u201CBanks operating in the domestic market will benefit from the reduced 10% rate and there the government has introduced a level playing field for banks operating in the domestic market and the QFC.
E&Y Qatar highlighted that the law retained a 35% tax rate for the oil and gas sector with the lowest rates being applicable for other sectors.
The new tax law has introduced the final 5% withholding tax on royalties and technical fees and 7% on interest, commissions, intermediary fees and board remunerations.
Regards
arul

Derived Flow (Money Market)

I have created a derived flow being 0.1% of the capital amount. The derived flow is oulling through into the generated cash flow but the calculated values is not pro-rata for the number of days. I expected it to be 92/365 days. In the condition it shows number of days as 92, number of base days as 365, int calc method as Act/365 but the calculation is for the full 0.1%. Can anyone advise on how to achieve the pro-rata calc?

Hi,
if you would have heard about the "basics of TRM" already (e.g. in training FSC-010), you might know, that the Derived Flows are necessary for e.g. calculating Withholding Tax Flows (based on Interest Flows).
The help-text button left-side from the customizing node is normally helpful, too.
Regards
Lorenz

Generate Withholding tax on interest Money Market instrument

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