WHT & EXTENDED WHT

Hello gurus
Can any one tell me difference between
Standard With hold tax and Extended With hold tax??
also
Please send if possible any WHT config steps for USA to generate 1099 report.
[email protected]
Thanks in advance
Hari P

hi
withholding tax:
When a customer that is authorized to deduct withholding tax pays invoices from a vendor subject to withholding tax, the customer reduces the payment amount by the withholding tax proportion. The customer then pays the tax withheld directly to the appropriate tax authorities
Extended withholding tax:
With extended withholding tax, you can process withholding tax from both the vendor and customer view.
The key concept in extended withholding tax is the distinction between withholding tax type and withholding tax code.
Regards
ramana

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Plz send extended wht

plz tell extended wht configration
Urgent,
mee krishna

Hi,
WHT has 2 types a. Accrual basis b. Payment Basis
Path: IMG FA-Fin GS WHT-Extended WHT
1.     Basic Settings
a.     Check WHT countries: Check ur country
b.     Calculation
i.     Withholding tax type Define WHT type for invoice posting: Give ur country, tax type, Base Amt Select Gross amount à Save
ii.     WHT Type Define WHT for payment posting Similar to 1bi
iii.     WHT Code - Country, WHT type, Base Amoutn: 100%, Post Indicator: 1: Std posting, Calculate: WHT Rate: Give ur tax rate. Similarly do for payment posting
c.     Define formula for calculating WHT-Give basic details and enter other details by double clicking Formula for calculating WHT. Do for both Accrual and payment
d.     Company code Assign WHT to cocode Do for both payment and accrual
e.     Activate Extended WHT
2.     Posting: Accoutns for WHT Define accouts for WHT Give chart of acct Select WHT code and Type. Give the type and code of both accrual n opayment
3.     IMG-Logistics General Tax on Goods movement India basic settings Maintain Cocd settings Give first month and save
4.     Attach the WHT to Vendor Master (FK02 change; FKO1 Create) Select WHT; Tax type: Either payment/accrual; Select Liable and save
5.     Try posting entry thru F-43 and enter the WHT. Document àSimulate
Pls. assign points, if useful</b>
Regards,
Sridevi

Classic wht and extended wht

hi,
may i know what is the difference between classic wht and extended wht? can advise what is the major difference between these two?
thanks

Hi,
Classic WHT- In some countries, the law provides that invoice recipients must withhold a certain portion of the payment amount and pay this to the tax authorities as withholding tax on behalf of the vendor. This requirement exists in the United Kingdom, for example. In other countries, withholding tax need only be reported to the tax authorities for certain vendors, such as self-employed people. Withholding tax is not posted in these countries. This is the case in France, for example.
Withholding tax amounts are reported to the tax authorities at regular intervals and a statement is also sent to the vendor periodically. These reporting periods vary from country to country.
The way in which withholding tax is calculated depends on the type of service. Transactions may:
Have a variable base for tax/SI contributions
Have different tax rates
Not relevant for withholding tax
EWHT-With extended withholding tax, you can process withholding tax from both the vendor and customer view.
In Accounts Payable, the vendor is the person subject to tax, and the company code is obligated to deduct withholding tax and pay this over to the tax authorities on the vendoru2019s behalf. In Accounts Receivable, the company code itself is subject to tax, and the customers that do business with this company code deduct withholding tax and pay this over to the tax authorities on the company codeu2019s behalf. In both cases, the business partner of the person/entity subject to tax deducts the tax and pays it over to the tax authorities.
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.
For more information about the functions of extended withholding tax (in comparison to classic withholding tax), see Withholding Tax
The following special features also exist:
In some countries, such as Argentina and Italy, other kinds of posting are required for certain business transactions. Instead of the payment amount being reduced by the withholding tax amount, the withholding tax is posted as an offsetting entry to an expense account You make the relevant settings in the withholding tax code.
Where cleared items are reset, the clearing document is automatically reversed if it contains withholding tax data. For withholding tax types with accumulation, the accumulation base amount is adjusted if the payment document is reversed.
Hope this helps.
Rgds
Manish

Migration from Classic WHT functionality to Extended WHT functionality

Hi Experts,
For a US based client we have a requirement which requires migration from Classic WHT to Extended WHT.
I would appreciate any pointers on this, especially if you have a document containing all the steps required for migration, please do share with me.
mail to - [email protected]
Thanks

Hi
please see below docuemnt
http://help.sap.com/saphelp_470/helpdata/en/66/efdf3a61ef300ee10000000a114084/content.htm
Migration from Withholding Tax to Extended Withholding Tax - India - SAP Library
Withholding Tax Data Migration Tool - India - SAP Library
378532 - Migration to Extended Withholding tax:documentation
339523 - Warning when activating extended withholding tax
353552 - Migration to extended withholding tax - Programs
353553 - Migration to extended withholding tax - Information
186989 - Changeover withholding tax
many thanks

Extended WHT tax type and tax code

Hi,
In extended WHT, why can have the same tax type with several tax code? I know that they are having different tax deducted percentage but I still do not sure why need to have tax code assigned to tax type.
Can anyone give advice?
thanks alot

hi,
i know that tax type are for either at the time of invoice or payment but you still not gave advice of why need to have tax code.
i know tax code is to use to determine percentage but what is the relationship between them.
thanks

Activating Extended WHT

Hi Experts
For a US based client we need to activate extended WHT functionality in 3 out of 5 company codes within the same country.
We would like to have inputs on the impact it will have, specially because of the fact that we are not activating it for all company codes.
At the same time please let us know what are the advantages for activating this for all company codes over few.
Thanks

Hello,
what, i can see the impact if one of the Vendor is common among the 5 company codes, then how you will handle the WTH tax for that vendor.
thanks

Activating Extended WHT 3 years after company went live

Hi Experts,
I have one query as my client is having a requirement that they want to assign new WHT Types to the existing company codes, but I have doubt how it will impact the historical data that has already been posted.
Some related points:
WHT is applicable at vendor Payment posting.
These additional company codes(For those WHT type has to assign) are already live since 2010.
If I'll give obligated from date while assigning WHT Type to Company code whether it will have any impact on historical data.
If I will give the obligated from date as 01/01/2015 how can I convert the already posted data as WHT applicable. Do I have to use program RFWT0020 or RFWT0010.
Regards,
Amit Goel

Hi Mukhthar,
Thanks for the reply..
I am aware that we can assign tax type to existing company code but my question is what impact will it have on the data that has already been posted if I give the obligated date from say 01/01/2007(Go live date of company code) or if I'll give 01/01/2015(Current fiscal year).
And as far as I know RFWT0010 program is for WHT at open items where as we have it at payment level.
Correct me if my understanding is wrong about RFWT0010 Program.
Regards,
Amit

With Holding Taxes vs Extended WHT

exact phase i want

Hi
Please see the follwing site
http://help.sap.com/saphelp_47x200/helpdata/en/fb/79793a4f405b02e10000000a11402f/frameset.htm

Lower deduction of TDS for Vendors

Dear Experts,
My client requirement is,when the vendor gets an exemption certificate from income tax authority for a certain percentage for a particular Threshold limit after that the system has to calculate the normal TDS rate.
I have gone through the different thread but could not find the proper solution.
Please guide how to configure the system to calculate TDS for a lower percentage upto the threshold limit...after that normal TDS should apply.
Regards,
Venkat.

Hi,
You can maintain exemption % in vendor master but there is no feature to define the limit and deduct tax as per the limit.
You can meet this requirement by defining formula in the path IMG - FA - FA Global settings - WHT - Extended WHT - Calculation - WHT codes - Define formulas for calculating WHT.
Here you can define the reduced tax rates and exempted amount to be deducted for the tax type & code combination.
Regards,
Jyoti

FB60 vendor invoice

FB60 vendor invoice
Transaction : posting a vendor invoice and offsetting entry is a G/L expense account
When i enter equal amounts (invoice amount and g/l amount) i am getting an error saying balance not zero
But i varied the amount it is letting me post
ex 5300 as invoice amount and 5000 as g/l amount
Why is this so?
Points promised
Prashanth

Hi,
WHT has 2 types a. Accrual basis b. Payment Basis
Path: IMG FA-Fin GS WHT-Extended WHT
1.     Basic Settings
a.     Check WHT countries: Check ur country
b.     Calculation
i.     Withholding tax type Define WHT type for invoice posting: Give ur country, tax type, Base Amt Select Gross amount à Save
ii.     WHT Type Define WHT for payment posting Similar to 1bi
iii.     WHT Code - Country, WHT type, Base Amoutn: 100%, Post Indicator: 1: Std posting, Calculate: WHT Rate: Give ur tax rate. Similarly do for payment posting
c.     Define formula for calculating WHT-Give basic details and enter other details by double clicking Formula for calculating WHT. Do for both Accrual and payment
d.     Company code Assign WHT to cocode Do for both payment and accrual
e.     Activate Extended WHT
2.     Posting: Accoutns for WHT Define accouts for WHT Give chart of acct Select WHT code and Type. Give the type and code of both accrual n opayment
3.     IMG-Logistics General Tax on Goods movement India basic settings Maintain Cocd settings Give first month and save
4.     Attach the WHT to Vendor Master (FK02 change; FKO1 Create) Select WHT; Tax type: Either payment/accrual; Select Liable and save
5.     Try posting entry thru F-43 and enter the WHT. Document àSimulate
The above is the configuration for Extended WT
Regards,
Sridevi
<b>* Pls. assign points, if useful</b>

CIN and WHT

Hi experts - would like to confirm if CIN activation is a pre-requisite for using Extended WHT functionality in ECC 6 package.(I believe this is not the case).
Also, possible impact of not activating CIN on service tax would be highly appreciated.
Regards,
SGP

Of course you will have to invoke CIN to use extended withholding tax....because...
1. View J_1IINDCUS has to be maintained if you want to create challan through J1INMIS.
2. View TRWCA also has to be maintained in order to copy section code TDS GL line items..
Regards,
Chintan Joshi

Wht account entries

hi,
for withholding tax posting when invoice
cr vendor          980
dr tax expense 1000
cr wht payable   20
1 but for withholding tax posting when payment
cr bank clearing 980
dr vendor          1000
cr wht payable     20
2 subsequently when come to bank recon
dr bank clearing     980
cr main bank       1000
3 make payment of wht
dr wht payable    20
cr bank clearing 20
my question is, it is not balance off as bank recon time and payment of wht time could be different. so i would like to know if double entry in 1 2 and 3 is correct.
thanks

Please note that WHT should be accounted either at the time of invoice or at the time of payment but not both.
In your case if we assume that tds happens at the time of payment, then following entreis are possible
At the time of invoice
CR Vendor - 1000
Dr Exp       - 1000
(At this time, base amount, TDS amount are determined by the system, but no posting happens to WHT)
Payment
Dr Vendor - 1000
Cr WHT     -    20
Cr Bank Clrng    - 980
Bank statement
Dr Bank clearing - 980
Cr Bank - 980
Hope this helps

Classic WT To Extended WT

Dear SAP Experts,
I am working on upgrade project from SAP 4.7 to ECC 6.0.
My client uses the classic withholding tax and they want to go for extended withholding tax.
What would you suggest me to configure EWT from first or should I go for Migration.
What precaution I should take in both the cases.
Thanks & Regards,
Reva Naik.

Hi,
check the link -
http://help.sap.com/additional/cv_india/en/home.htm
In it Navigate as - TDS - Extended WHT-Migration from classic to WEHT
Regards,
Sridevi
Pls .assign points, if useful

Activating Extended Withholding Tax - New Company Code

Hello Gurus, I have a question regarding Extended Withholding Tax that I have not previously seen addressed.
My client is live on ECC 6.0 EHP 5 and would like to activate Extended Wittholding Tax for its Colombian company code which is not yet live.
All existing company codes on the same client are using Classic Withholding Tax, where withholding is needed. This is working well in many countries around the world, but will not satisfy the Colombia legal requirements.
Since Extended Withholding Tax is activated by company code, do we need to perform the Withholding Tax Changeover / Data Conversion steps for all existing entities live on SAP with Classic Wittholding?
Keep in mind that we do not plan to activate Extended Withholding Taxes in any other company code that already has productive data unless we absolutely must.
However, previous questions asked of this nature (and the SAP documentation) had ambiguous replies about whether other Existing company codes are impacted (and must be converted) as a result of activating EWT for a brand new company code with no existing master data or transactional data to be converted.
Thanks for your help.
Guy

Hi Guy,
I believe that you can use extended Withholding tax for new company code without impacting the existing company code with classic WHT configured as my belief is extended WHT is activated at company code level.
Probably you can try to configure colombia in your development system and do some testing for Colombia and negative testing for few company codes with classic WHT.
Thanks and Regards,
Gaurav

Error in creation of remittance of challan

Dear Guru,
I need one help,
when i am doing remittance of Challan, i am getting below attached file error, any body can help.
Error is - "business place for document could not be determined"
Please tell any solution
it urgent,
Regards,
manas

Hi Manas,
maintain the nuber group assign the number range to it.
Go to -Extended WHT-india-Remitence Challan-Define Number Group
Assign number ranges to Number Group
Maintain Number ranges
Hope this would help you.
Regards
Pankaj P

WHT & EXTENDED WHT

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