Payment to Foreign Vendor

Hi Experts,
Can some body shed light on this..
Can we run the payment program for foreign vendors in their currency.. if soo what r the settings needed.
thanks in advance,
siva reddy s.

Hi,
For the above problem u can send it my mail id i .e [email protected]
points are assured.
bye
siva reddy s.

Similar Messages

Payment to Foreign Vendors including Bank Charges

Hi All,
We have below scenario while making advance payment to Foreign Vendors.
1. Advance to Vendor in USD
Vendor with SPL GL Dr
    Bank Cr
2. There is bank Charges in INR that includes Service tax also
    Bank Charges Dr
    Service Tax rec Dr (10.3%)
                    Bank Cr
3. In this scenario bank additional amount as Service Tax
In Legacy System user is making Entry as follows:
Service tax rec Dr
   Bank Cr
I want to know how to pass this entry in SAP
Please guide
Regards,
Vivek

Hi,
if you want pass the sap accounting entry include with service tax :
Vendor A/C Dr XXX
Bank Charges a/c DR XXX
Service Tax a/c DR     XXX
TO Bank Account
Regards,
Upendra.

AUtomatic Payment Program - Unable to make payment to Foreign Vendor having bank account in home country and home currency

Hi
We have company code in India. Payment method C is configured. Now we have a requirement that we have to make a payment to a vendor in Bangladesh who is having Bank account in India in INR. Already I have ticked the foreign payments as shown below
Now when we have to make a payment to bangladeshi Vendor , I am unable to generate any payment.
Please Find the error detail as shown below:
> Payment method selection additional log
> Payment method selection for items due now to the amount of INR 100,00-
> Payment method "C" is being checked
> Street or P.O. box entry is missing
> No permitted payment method exists
Information re. vendor 9021121 / paying company code 1021 ...
... payment not possible because of reported error
End of log
Step 002 started (program SAPFPAYM_SCHEDULE, variant &0000000001176,
Step 003 started (program RFFOEDI1, variant &0000000000398,
Program RFFOEDI1: No records selected
Step 004 started (program RFFOUS_C, variant &0000000000784,
Program RFFOUS_C: No records selected
Job finished
Anybody having any idea. Please Help

Hi Raj,
Please check the following things once.
1. Check the vendor pyt method in XK03. Vendor should not be blocked at any level.
2. Also check - FBZP - Pyt methods under country level - what are the mandatory parameters ? - Street, P.O. BOX or box pst code or bank acc.no, swift code, IBAN No.- check those parameters are maintained or not? If no, pls maintain the same.
3. Doc currency - You have to maintain the INR currency in invoice. Also maintain the entry for INR currency in FBZP - Bank determination- ranking order & bank accounts. Else not psbl to make payment in foreign currency.
I hope it clears else revert us with your issue.
Thanks & Regards,
Lakshmi S

NRA withholding for payments to Foreign vendors

Hi
I would like to discuss with configurators from other US companies as to how they have implemented NRA withholding.
In particular, how they handle varying tax rates for certain countries under tax treaties.
Thanks
Deepa

How to determine the amount to be withheld
Question 16: If a payment to a foreign person (foreign vendor) is determined to be FDAP and U.S. sourced, how much should be withheld?
Answer 16: The statutory withholding rate is generally 30%. This rate should be generally applied to the gross amount of the payment. See Q&A-19 below concerning this rate.
Question 17: When should the tax is withheld?
Answer 17: Withholding is required at the time that the payment is made. A payment is considered to be made when the beneficial owner of the payment realizes income. There does not need to be a transfer of cash or other property.
Question 18: When should the tax withheld be deposited?
Answer 18: The amount of tax that the US withholding agent and is required to withhold determines the frequency of the deposits. The frequency could be annual, monthly, or quarter-monthly. Publication 515 details the specific rules for making deposits including the deposit due dates, which forms to use, electronic deposit requirements and penalties for failure to make deposits timely.
Question 19: Can the statutory rate (30%) be reduced?
Answer 19: If the foreign vendor is a resident in a country that has a tax treaty with the United States, the rate may be reduced. Each treaty has specific provisions which determine the reduced withholding rate. These provisions reduce the withholding rate based on the type of income and the status of the recipient.
Question 20: Is there a listing of treaties and rates to be applied?
Answer 20: Publication 515 provides a listing of tax treaties and the withholding tax rates to be applied to various types of income under each treaty. The Publication 515 is located on the IRS website which is www.irs.gov.
Question 21: How can a foreign vendor certify its foreign status?
Answer 21: The foreign vendor must provide the withholding agent with form
a properly completed W-8 or Form 8233 (see FAQ section 5 for further information).
5. How should the withholding agent properly document the foreign status or treaty claim of a foreign person
Question 22: Must we obtain documentation from a foreign person to support its claim of foreign status or treaty eligibility?
Answer 22: In order to reduce the amount that is required to be withheld on a payment of U.S. sourced FDAP income to a foreign person (foreign vendor), or to exempt such a payment from withholding tax, the withholding agent must have documentation from the foreign vendor to certify its non-U.S. status and, if applicable, its eligibility for the treaty benefits claimed. Such documentation must be submitted by the foreign vendor in the form of a Form W8-IMY Form W-8 or Form 8233.
Question 23: Which forms would be most commonly used by foreign vendors?
Answer 23: Form W-8BEN (Beneficial Owner), Form W-8IMY (Intermediary), Form W-8ECI (Effectively Connected Income) and Form 8233.
Question 24: When should Form W-8BEN be used by foreign vendors?
Answer 24: Form W-8BEN should be used by the foreign vendor to certify that it has non-U.S. status. If a treaty claim is made by the vendor Part II of the
W-8BEN must be completed to be eligible for the treaty benefits.
Question 25: When should Form W-8ECI be used by our foreign vendors?
Answer 25: Form W-8ECI should be used by a foreign vendor to certify that the payment is income that is effectively connected with a U.S. trade or business. No withholding is required on such income. Rather, such income must be on some cases, a W8-BEN can be provided by a U.S. Branchu2019s income tax.
Question 26: When should Form 8233 be completed by a foreign vendor?
Answer 26: If you make a payment to a non-resident alien individual as compensation for personal services performed for you in the United States, that individual may have to provide you with Form 8233 instead of Form W-8. See Form 8233 and its instructions for further information.
Question 27: Are we responsible for the validity of the documentation presented to us by the foreign vendor?
Answer 27: In order to rely on the documentation, it must be valid. In order to be valid, the documentation must meet the requirements of Treasury Regulation 1.1441 and must be completed in accordance with the applicable Form instructions (see Instructions for the Requester of Forms W-8BEN, W-8ECI, W-8EXP and W-8IMY).
In addition, in order for the documentation to be valid, the US withholding agent or multi-national must not know, or have reason to know, that the information provided on the documentation is unreliable or incorrect. If the US withholding agent (multi-national) has such knowledge, or if the documentation is invalid for any reason, the withholding agent must apply the presumption rules set forth in Treasury Regulation Section 1.1441, 1.
Question 28: When should the Form W-8 or Form 8233 be obtained from the foreign vendor?
Answer 28: In general, the documentation must be in the possession of the withholding agent at the time of payment.
6. How to report NRA payments and withholding
Question 29: What forms should we use to report payments to foreign persons (foreign vendors) of FDAP income that is U.S. sourced and any amounts withheld on such payments?
Answer 29: Forms 1042, 1042-S and 1042-T are the forms that a withholding agent (multi-national) must use to report payments to foreign persons of FDAP income that is U.S. sourced and any amounts withheld on such payments.
Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons should be submitted to the IRS in order to report the total aggregate NRA payments, withholdings and deposits made by the withholding agent during the applicable year.
Form 1042-S, Foreign Personu2019s U.S. Source Income subject to Withholding is an information return. The withholding agent should submit these information returns to the IRS and the payee in order to report the payments and withholdings made during the year that are specific to the payee, the type of income paid and the withholding rate. Form 1042-T, Annual Summary and Transmittal of Forms 1042-S should be used to transmit paper Forms 1042-S to the IRS.
7. What to expect from an IRS audit regarding NRA reporting and withholding responsibilities
Question 30: If upon audit, it is determined that there has been under reporting and under withholding, will the IRS assess penalties and interest in addition to the under withholding amounts due?
Answer 30: If deficiencies in reporting, withholding and depositing with regard to NRA payments are found on audit, the IRS will consider all applicable penalties, including, but not limited to the following:
Failure to file (IRC Section 6651)
Failure to pay (IRC Section 6651)
Failure to deposit (IRC Section 6656)
Failure to file information returns (IRC Sections 6721-6723)
Negligence (IRC Section 6662)
In addition, interest will be assessed on the under withholding.
Question 31: If upon audit, it is determined that there has been under withholding, on account of a failure to document any vendors, as described above what recourse does the withholding agent have in order to reduce the under withholding?
Answer 31: The withholding agent can obtain certification of foreign status and the treaty claim from the foreign vendor. This is accomplished by the vendor completing a valid Form W-8. A valid Form W-8 will allow a reduction in the under withholding from the 30% statutory rate for the type of income paid.
Since the documentation is being obtained after the payment is made, the foreign vendor should provide an additional statement indicating that all facts and elections made on the Form W-8 were true, correct and complete at the time of the payment. Documentation other than this statement might be considered based on the facts of the particular case.
Question 32: If the under withholding has been u201Ccuredu201D by obtaining a
Form W-8 or other applicable documentation after a payment, according to
Q&A-31 above and such documentation is found sufficient is there any remaining liability to the withholding agent?
Answer 32: In general, there is no remaining liability for tax, interest and penalties. Exceptions to this apply in case in which the withholding agent is relieved from the tax liability by showing that the underwithholding tax was paid by the payee. In those cases, the withholding agent may still be liable for interest and applicable penalties. In other cases, reporting-related penalties might still apply where no underwithholding results on account of the cure, but the filed Form 1042-S reflected incorrect information.

Error In Transaction F-44 for Foreign Vendor Payment

Hi Experts,
User is getting the Error In Transaction F-44 (G/L account 14281001 xxxx does not exit) while doing Vendor Payment to Foreign Vendors.
When I checked in Vendor Master Data, Reconcilliation account is maintained for all Foreign(other) & Foreign(Intercompany) Vendors.
The GL 14281001 is maintain in the account determination configuration for other Foreign Vendors.
User is getting this Error After successful FF67 transaction Process.
Please advice.

Hi Amitash,
GL is created @ COA level & not mark for deletion. This GL is not created in Company code. I discussed with user she was saying
F-44 transaction is booked a realized gain/loss while a foreign vendor invoice clearing vs payment. Normally this realized gain/loss must be booked directly to the foreign vendor account which is linked to GL XXXXXXXX for all IC foreign vendors and linked to GL YYYYYYYY for all other foreign vendors .
It will be not correct to book a foreign vendor realized gain/loss to a separate account therefore a new GL 14281001 should not be created in comp code XXXX, instead of incorrect GL14281001 SAP must select either GL XXXXXXXX for IC foreign vendors or GL YYYYYYYY for all other foreign vendors.

Not able to post Realized Gain/Loss GL acct during foreign vendor payment

Dear Experts.
1. When I make a vendor payment by using F-53 for USD payment for foreign vendor. I am supposed to get Realised Gain /Loss account for the variation on payment date.
2. My local currency is INR and foreign Currency is USD.
3. DIrect quote and indirect quote maintained for INR and USD.
4. During payment I have selected USD currency and given the conversion rate.
5. When I paid to vendor, realzied amount did not capture.
My configuration for Foreign currency valuation is as follows:
1. T. COde OBA1. and KDB - Here I maintained unrealized gain and loss account
2. T. COde OBA1. and KDF - Here I maintained Realized gain and loss and unrealized loss and gain along with balance sheet adjustment account for foreign vendor reconciliation account.
Please suggest me for this issue.
Best Regards
Surya

Hai Surya,
Check the OBA7 t.code for doc type whatever ur using like KZ in that check the Exchange rate type specified or not like M,G, or B based on ur OB08 t.code settings
Regards
Madhu I

Payment program for foreign vendors

Hi Experts,
Can some body shed light on this..
Can we run the payment program for foreign vendors in their currency.. if soo what r the settings needed.Pls send in this mail iD ([email protected])
thanks in advance,
R.Manigandan

Hi,
Yes we can run the payment program for foreign vendors in their currency.
In FBZP double click on Pment Methods in Country
Select your country and double click on Currencies allowed
You can specify the foreign currency here. SAVE and Back
Double click on Pment Methods in Company Code
Double click on the company code
and Tick all the three check boxes for foreign payments and foreign currency payments. SAVE
This is the required config apart from the general configuration.
Hope it helps
Regards
Jyostna

Foreign Vendor payment

I entered an invoice from a foreign vendor who billed in foreign currency but wants to get paid in US dollar by bank transfer. The system correctly converted the foreign currency to US dollar. But in automatic payment run, it did not pay the vendor. The job log displayed the error "payment with currency BDT, payment method:no valid payment procedure". It also displayed "payment is not possible, beacuse of reported error" Payment proposal list shows " Error 006 No valid payment method found"
I am not sure what I am doing wrong. Your suggestion will

Hi Rashid,
Check in transaction FBZP-> payment methods in company code-> select the payment method you are using , check the foreign payments/foreign currency payment
select all the options as per your requirements
Assign points if useful
Regards
Genie

Foreign Vendors ACH Payment

Hi All,
In my company, we are already processing Domestic Vendor Payments (USA) using ACH payment. We send EDI 820 to bank.
Our company requirement is to process Foreign Vendor Payments also using ACH Payment.
Could any one let me know what are the necessary steps i need to focus on to achieve our company's requirement.
1) Configuration part.
2) Vendor Master
3) Exchange Rates
4) What are the changes in EDI 820, which will designate that the payment is made to Foreign Bank.
Thanks
Rajanikanth.

I cannot answer all questions but here are some pieces that you need to look at.
In FBZP ("Pmnt methods in company code" option), you need to check the checkboxes 'Foreign business partner allowed' and 'Cust/vendor bank abroad allowed?' for the payment method you want to use. You need to do this in all company codes in which you want to use the payment method for foreign vendor payments.
Assign the payment method in vendor master. You will also have (foreign) bank data in vendor master.
Maintain daily exchange rates in TCURR table (OB08 transaction).

Payments in foreign currency

hi
when payments made for foreign currency transactions, what postings are made to balnce sheet adjustment account for foreign vendor? how is this account adjusted after payment is made so that true reflection of vendors can be reported.
tx

Hi,
When the revaluation program is run (normally during month end), the foreign currency transactions will get revaluated and the loss/gain gets posted to the B/S adjustment account.
If the program, in the above step, was run with the "Reverse posting" indicator marked, the documents created in the above step would be reversed automatically on the 1st day of the next month. Thus the adjustment account gets set off.
If the "Reverse posting" indicator was NOT set, then during the invoice payment, the adjustment entry (from the first step) gets reversed. In the payment document you can find an additional entry that sets off the B/S adjustment account.
Hope this helps.
Regards,
Mike

How to pay a foreign vendor on a French Bank Account

Hi Team
We have a issue where we need to clear a Forien Vendor.
So we used a payment menthod say "T" where is marked Foriegn payments allowed.But F110 did not work as the Bank Account was Local .
Company belongs to France
Vendor belongs to Swiss
Vendor Bank Account Belongs to France
So clearing Foreign vendor with Local Bank Account,is not possible
So please advice us what are the settings to be done where we can clear the foreign vendor.through F110.using a payment method wich alloes FOrien vendor using Local Bank Account.
Thanks
Swetha

Hi Sujatha,
All the settings of F110 come From FBZP, have you check the following :
- FBZP--Ranking Order : is you Bank in the first Rank
- FBZP--Bank Account : in your case you must have this entry
House Bank : Name of the Local Bank Account (France)
Payment method : T
Currency : CHF
Bank Subaccount : your bank subaccount
- FBZP--Available Amounts : Check if you have an available amount for your Bank (France) and Currency (CHF)
Don't forget to check also if for this foreign vendor we have the payment method ' T ' in the master Data (Tcode : XK03)
Regards

How to app run for foreign vendors and customers please tell the steps

hai every body this is raj
i am asking how to create the foreign vendors and how to apprun for foriegn vendors please tell the steps
and another questions is how to run app for customers t

Lets say your company code is in country IN. Every vendor you create (using XK01, lets say) with a country other than IN is a foreign vendor for your company code. To enable APP for foreign vendors, make sure you check the checkbox 'Foreign Business Partner Allowed' in 'Payment method in company code' in T Code FBZP. If the vendor invoice is in a foreign currency, make sure you include that currency as permitted currency for that payment method.
To run APP for customers, your 'Payment method in country' in FBZP must be for incoming payment.

How to set up wire transfer for foreign vendor?

Hi all,
Prior to the question I posted, I guess my question is : what configuration steps need to be done in order to set up a wire transfer for foreign vendor?
please advise.

Hi Nancy,
You need to have a Bank Account which is setup to issue payments in foriegn currency.
Apart from that all other steps remain the same as to doing a domestic wire.
Provide points if found usefull.
Thanks,
Praveen

Set up wire transfer for foreign vendor

Hi all,
anyone knows how to set up wire transfer for foreign vendor? please advise.

Hi Nancy,
You need to have a Bank Account which is setup to issue payments in foriegn currency.
Apart from that all other steps remain the same as to doing a domestic wire.
Provide points if found usefull.
Thanks,
Praveen

Foreign vendor

Our home currency in SAP is ZAR and we have to procure material in foreign currency(NAD). But I dont have any idea how this procurement process works...Actually there is no currency factors or currency type update in FI side.....but i need basic clarifications...
1. I have to create PO in ZAR(home currency) or NAD (foreign currency)?
2. Is tax is applicable for these foreign vendors or not? (we are paying 14% vat in local but foreign vendor charging 15% vat)
3. What are the other charges applicable other than forex fluctuations?

Hi Rashid,
Check in transaction FBZP-> payment methods in company code-> select the payment method you are using , check the foreign payments/foreign currency payment
select all the options as per your requirements
Assign points if useful
Regards
Genie

Payment to Foreign Vendor

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