Withholding Tax(TDS) on Advance(F-48) and On Final Payment-F-53

Hi Expert,
I am facing an issue related to TDS, on vendor advance. Its little different scenario, However rule is whichever is early.
Requirement is like this, generally they deduct TDS on down payment and in case of final Payment. No TDS at the time of invoice booking.
For example- Down payment made to Contractor Rs 200 @ 2%, Total invoice value was Rs 1000. TDS to be deducted on advance will be Rs 4. Invoice booked for Rs 1000.
Hence at the time of payment F-53, system should deduct TDS Rs 16 on Rs (1000-200) Rs 800. How can we achieve same while making payment F-53?
If I have to do same thing in case of invoice (FB60) then I can change TDS base value manually and put Rs 800 then system will calculate automatically.
From configuration point of view I have ticked on-
Change view “Withholding tax type definition-posting at time of paym. Under this ticked both option one by one even its not working.
No centre invoice
Central inv.prop
Regards,
K.Prasad

Dear Mukthar,
I tried but its not working.During Payment system is adjusting TDS automatically which we paid on Advance but during payment,TDS on final payment is not clearing and not assigned amount is not getting zero.
Step 1: Advance Amount Rs 1000@ 2%
Step 2:Invoice Booked of Rs 5000,no TDS during Invoice booking but payment withholding Tax code was ticked during Invoice booking,as you suggested.
Note:Total Invoice value is Rs 5000 out of which Rs 1000 made as an advance.Please see-step 1.
Step 3:F-54 advance clearing against above Invoice
Step 4: Payment of Rs.4000 subject to TDS
Here is problem,system is calculating TDS on Rs 4000@2% which is correct but not assigned amount is not getting zero.
How to clear this?
Once you click on INR net 4,900 blue line,then amount entered gets 5000.
Now click on WH tax tab,which is showing everything correct. but question is how to clear Rs 80 and not assigned field make Zero.Which is our requirement. If not assigned become zero then issue resolved.
Hope you understand my problem.
If i click on difference posting and simulate then -Not assigned tab gets Zero but it create one open item with Document types-KZ, which again is a issue to clear and you cannot clear.And if you simulate it then system is reversing TDS on advance and final total TDS is crediting this time.Till here no issue. Here is simulation entry-
This you are able to get only once you click on difference posting but in FBL1N with document type KZ Rs 80 would be appear and that you cannot clear anyway.
Vendor Master detail:
Hope you understand my problem,if you run this scenario then you would have more clarity however I covered all process.
Regards,
Prasad

Similar Messages

Withholding Tax (TDS) on provisions

Dear all,
Can you please let me know the procedure for reversing the TDS on provisions which is based on the provisions outstanding as on the year end.
We are able to achieve the dedution of TDS on provisions through the T-Code of J1INPR.
Afterwards, we normally book the vendors bill and deduct TDS on the same.
However as per the standard method we should run J1INUT to reverse the TDS payable which is credited at the time of booking the invoice.
But when we run the J1INUT in test run, system is giving the correct reference of the original entry of TDS on provision. But when we remove the tick of test run and then run J1INUT, system is giving the error of select the valid function.
Can you please guide how to handle such situation.
Regards
Dhirav Shah

Dear Mukthar,
I tried but its not working.During Payment system is adjusting TDS automatically which we paid on Advance but during payment,TDS on final payment is not clearing and not assigned amount is not getting zero.
Step 1: Advance Amount Rs 1000@ 2%
Step 2:Invoice Booked of Rs 5000,no TDS during Invoice booking but payment withholding Tax code was ticked during Invoice booking,as you suggested.
Note:Total Invoice value is Rs 5000 out of which Rs 1000 made as an advance.Please see-step 1.
Step 3:F-54 advance clearing against above Invoice
Step 4: Payment of Rs.4000 subject to TDS
Here is problem,system is calculating TDS on Rs 4000@2% which is correct but not assigned amount is not getting zero.
How to clear this?
Once you click on INR net 4,900 blue line,then amount entered gets 5000.
Now click on WH tax tab,which is showing everything correct. but question is how to clear Rs 80 and not assigned field make Zero.Which is our requirement. If not assigned become zero then issue resolved.
Hope you understand my problem.
If i click on difference posting and simulate then -Not assigned tab gets Zero but it create one open item with Document types-KZ, which again is a issue to clear and you cannot clear.And if you simulate it then system is reversing TDS on advance and final total TDS is crediting this time.Till here no issue. Here is simulation entry-
This you are able to get only once you click on difference posting but in FBL1N with document type KZ Rs 80 would be appear and that you cannot clear anyway.
Vendor Master detail:
Hope you understand my problem,if you run this scenario then you would have more clarity however I covered all process.
Regards,
Prasad

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

Table name for Withholding tax (TDS)

Dear All,
I am unable to get data in J1INQEFILE but at the same time the bank challan update procedure is also completed. I want to check in table whether the data has got updated. Can anyone tell me the table name where this data gets updated for J1INQEFILE..
Thanking you in advance,
Ketan

Run ST05 while running any transaction you will be able to see all table which are getting updated or used by such T-code.

F-48 and Withholding Tax

Hello,
I'm trying to setup Withholding tax so that it post when an AP Down payment is created in F-48.
I had the Withholding tax to apply at time of Invoice, thinking that this might be the problem. Now I've changed it so that it's applied at time of payment.
This still did not fix the error.
In the 'Vendor: Add Items' screen, I enter the amount then it ask me to enter a Tax Code (this is another problem, a Tax code should not be required). So I enter the tax code and click on the 'Calculate Tax' box. Then I click enter and try to push on the 'Withholding Tax' push button. I get a message asking 'Has the Tax code been entered correctly', and I say 'OK'. The Withholding box never pops up for me to either enter or display the Withholding amount.
Does anybody know why this is happening?
thank you for your help!
Brett

Hello brett,
TDS codes will prepare at the time of invoice or at the time of advance payment. Depend upon the activity system will pick up the TDS codes from vendor master.
If vendor is debit then at the advance payment TDS codes will come if Vendor is credit at the time of invoice TDS codes will come.
Both TDS codes ( at the time of payment & invoice) are not deduct at the same time.
Field status variant:
Go to FS00 and give the gl account and click on Create/bank/interest tab to see the field status group attached. double click on that one it will directly take to field status variant screen(obc4) see the status of withholding taxes under TAXES tab. if withholding taxes option is in suppress mode convert into optional.
if still the problem continues go to SE38 RFWT0010 give vendor code and all required details finally deselect test run button. (there is no any problem even you run morethan one time).
Regards,
Sankar

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

Error at Withholding tax

Hi,
I am calculating withholding tax on down payment. At the time of down payment the system has calculated WHT properly and i have also posted invoice, then also system has calculated WHT. I want to clear this down payment against invoice. As per my knowledge the system should reverse the entry of with holding tax at the time of down payment. I do cleared the down payment in f-54 and then i tried to clear the payment aganist invoice in f-44.
But the system is giving error as " With holding tax invormation ignored"
Msg no. 7Q332
Diagnosys: the activity selected uses posting keys that are bit oayment relevant. This means WHT was not processed even though documents with WHT information were selected. Start the transaction again with new activity so as to include the WHT information for the document selected.
System response: In customizing you can swithoff the msg under change msg control for document processing in application &Q.
Procedure: check to see whether you can use a different activity or another transaction (FB05)
Could any one tell me if i change the msg control, does this WHT will calculate properly? I checked all the settings and fields status for all the posting keys which were triggered in these transactions.. But no use..
Could any one help me in this issue.
Thanks in Advance
Sabera

Hi
If you have not done the Configuration settings for the Reversal of TDS in F-54 follow these steps.
1. Create Business Place
2. Create Section Code
3. Assign Factory Calendar to Business Place
4. In Define Withholding Tax Type for Payment Posting, change the option to Central Invoice Prop.
Advance or DownPayment :
Use Transaction F-48 to make Down Payment, if you make a Down Payment Request through F-47, then you can make Down Payment either by F-48 or by running APP F110.
Invoice :
You can use any Transaction F-43, FB60, (Park -->F-63,F-65 & Post FBV0)
F-54 :
Here in the Entry Screen give the Invoice Number and in the next screen select the Down Payment Document and Double Click then check the last Column, you must get that Amount in that Column and then Simulate, You will see the TDS Amount will be Debited(Reversed).
The Reversal will not happen for Earlier Down Payment Documents, as they are posted with earlier configuration.
While assigning withholding Tax Types and Withholding Tax Codes in Vendor Master, kindly make a NOTE.
Give the Withholding Tax Type and select the Liable CheckBox and do not give Withholding Tax Code, leave it Blank.
While making Down Payments or Invoices, you will get a PopUp Box and there you select the Tax Code by pressing F4.
This is the Best Practice.
Hope this makes you a clear picture.
Regards
Venkat

1 items have not been activated due to inconsistent withholding tax info

Hi Experts,
I am doing Vendor Payment through T code:F-53
That time following error coming.
1 items have not been activated due to inconsistent withholding tax info
Message no. F5787
Diagnosis
The open items display different withholding tax information from the relevant business partner master record. For example, the number of withholding tax types in the open item could differ from the number of withholding tax types in the master record.
System Response
Items are not activated.
Procedure
Change the withholding tax data for the open item in question.
waiting for reply,
In advance Thanks & Regards,
Jemes

Dear Jemes,
the Error message F5 787 normally is displayed when you have
activated withholding tax at time of payment.
If at the moment of positing the invoice the vendor was subject to
withholding tax and afterwards, before the payment, the master data
was changed, there is an inconsistencie between the withholding tax
data in the invoice document and the withholding tax data in the master
record.
You should run report RFWT0010 in order to update withholding tax data
in the invoice according to the new withholding tax data information in
the master record. Please read the note 890111 that can be useful as well.
Please let me know.
I hope this helps You.
Mauri

Withholding Tax line item in Vendor Invoice (F-43)

I am implementing EXT Withholding Tax for a client. I have made all the settings but while doing the invoice after selecting the withholding tax codes for the vendor, system is not showing any line items for the withholding tax.
I have made the settings like this:
Defined business place, section codes, withholding tax keys, tax types, tax codes, applied the tax codes in the vendor master with 'liable' tick, defined in the tax code the posting indicator 1 for posting separate line item and activated the Ex Withholding tax in the company code. I have also made the field status of withholding tax as optional for posting key as well as FSV for GL accounts involved in the postings. Also made the vendor account group field status as optional for Withholding tax postings.
I am not getting where I have missed. System is also not shooting any error.
Please share your views.

Hi,
Did you do Configuration steps of Extended Withholding Tax(EWT) as follows.
1.Define withholding tax type for invoice posting
IMG----->financial accounting>financial accounting global settings>withholding tax---->
Extended withholding tax-->calculation>withholding tax type--
>define withholding tax
type for invoice posting
2.Define withholding tax type for advance posting
IMG----->financial accounting>financial accounting global settings>withholding tax---->
Extended withholding tax-->calculation>withholding tax type--
>define withholding tax
type for payment posting
3.Define withholding tax codes
IMG----->financial accounting>financial accounting global settings>withholding tax---->
Extended withholding tax-->calculation>withholding tax codes--
>define withholding tax
codes
4.Define formulas for calculating withholding tax
IMG----->financial accounting>financial accounting global settings>withholding tax---->
Extended withholding tax-->calculation>withholding tax codes--
>define formulas for calculating withholding tax
5.Assign Withholding tax type to company code
IMG-->Financial accounting--->financial accounting global settings>withholding tax----->
extended withholding tax-->company code--
>assign Withholding tax type to company code
6.Activate extended withholding tax
IMG-->Financial accounting--->financial accounting global settings>withholding tax----->
extended withholding tax-->company code--
>activate extended withholding tax
7.Assignment of accounts for automatic posting-----OBWW
IMG---->financial accounting--->financial accounting global settings>withholding tax--->extended withholding tax>postings>accounts for withholding tax--
>define accounts for withholding tax to be paid over
8.Maintain company code settings for india
IMG----->logistics-general--->tax on goods movements>India>basic settings--
> maintain company code settings for india.
9.Assign tax codes in vendor master----
XK02
Regards
Venkat

Extnded withholding tax

sir, when i have tried to view the posting of withholding tax entry for advance/down payment made to vender it shows an error of " WHTax amount exceeds the bank line items amounts" and it is not posting the tax amount to concerned account,
pls advise me how to customise the vendor master and WHTax codes and types for this

Hi,
The error is showing " WH Tax amount exceeds the bank line items amounts".
As per my understanding you might be did the wrong calculation in the configuration part. How ??
For example : You have to mentioned 2% instead of this you may mentioned like 200 %. Here the WHT amount is exceeds the bank line item amounts.
Transaction value for Rs.100
WHT - 200 % would be for Rs.200.
Please check your calculation configuration area in WHT.
Warm Regards,
Sivakumar Sathiyamoorthy

Withholding tax calculation @ Customer payment

Hi
Experts, can any one help me on this issue??. I want to calculate and post withholding tax for a customer at the time of incoming payment(F-28). I have already activated extended withholding tax, defined tax type, tax code, & assigned in the customer master data. But system not calculating the tax nor its displaying tax code in the payment screen, & throwing a message when I double click on the relevant tax column ie " withholding tax information missing from line item" I f someone could throw a light on this, it would be a great help,
Thanks in advance
Hariharan.

Kindly check
1. Define witholding tax type for invoice posting
IMG > Financial Account Global settings > Withholding tax > Extended Withholding Tax > Calculation > Withholding Tax type > <b>Define Withholding Tax Type for Invoice posting</b>
2. Define witholding tax type for payment posting
IMG > Financial Account Global settings > Withholding tax > Extended Withholding Tax > Calculation > Withholding Tax type > <b>Define Withholding Tax Type for Payment Posting</b>
and also check OBWW (Define account for w/h tax)
rgds.

Extended Withholding Tax ( Minimum/maximum Base Amount ) - with accumulati

We are facing problem in posting of vendor Invoice. Actually we have implemented Minimum base amount ( Rs. 75000/- ) at withholding tax type level and accumulation at per year in withholding tax type A1 ( for testing purpose ) and assign the same to a vendor. We have booked some invoices up to RS. 75000/- system working fine, no WHT is deducted. But now we have received a another Invoice Rs. 5000/- and at the time of booking of invoice system giving an error message
I have changed the error message to warning but itu2019s again showing the same error message.
Actually the problem is system calculate the WHT from the beginning of the year to till date and the amount of Vendor invoice is less the than the amount of WHT but itu2019s legal requirement and we have to post the financial entry as mentioned below
Fictitious figures
Vendor Account           Dr.           Rs,      1500.00     ( Debit instead of credit )
Expense Account           Dr.           Rs.      5000.00     ( Actual exp. Of Invoice )
WHT Payable Account            Cr.           Rs.      6500.00     ( Total WHT from the beginning
Please provide the any.
SAP reply
Dear Customer,
We understand your requirement. But the standard SAP system does not support a scenario where an invoice amount in lower than the tax amount.
This is not a localization specific requirement. The accumulation logic is a generic system behaviour and all countries use it. We cannot make any change in the standard in this regard and change the current system behaviour.
Option to handle this in the system
The only way this can be handled in the system is once the accumulation limit has been reached, use a separate tax type tax code with out accumulations.
Though this is not the ideal solution, this is the best possible solution for your requirement.
Accumulation is not localized for India and the standard solution vailable for all the countries is used by Indian customers too.
SAP is currently not looking at any enhancements to this feature.
Other than the option mentioned above, there is no other way of handling this in the system.
Best Regards,
Soumya
If any one have any otehr solution please inform us.

This cannot be possible for two reasons.
1. If you are not able to recover the amount from the Vendor, you'll have to bear it yourself which is a loss to the company.
2. Even if such a process is provided, you cannot alter the previous invoices and your EWT amount does not correspond to the invoice you account for. SAP works in an assumption that Tax will be calculated as a % of base price and cannot exceed it.
The only way to mitigate this is to decide whether a Vendor would require this exemption to be declared based on past experience and past amount of transactions in the beginning itself. If it is unlikely, better do not declare the accumulation limit for them. This will save you from incurring loss and reducing the risk for the company. Start deducting right from the beginning.
If you are not sure, instead of giving accumulation, you can declare exemption upto 75000. In this case, SAP cannot check whether the Vendor has crossed the limit or not. You'll have to manually check and pass a Debit note to that extent when he exceeds the limit. Again, this does not evade the risk of loss for the company. Also, you cannot do TDS post processing for this amount (like TDS Remittance challan, TDS Certificate etc).
So, in my opinion, try and decide if the Vendor would require accumulation right in the beginning itself. Even if not able to decide, you can still deduct the tax and issue a TDS certificate, which the Vendor can claim refund based on his transactions with you from the Income Tax in case he does not exceed the limit. This will limit the risk of loss for the company.
Ravi.

Extended Withholding Tax & MIRO - total balance

I have the following situation:
Extended withholding tax is active in company code and the withholding tax type is defined for invoice posting. Everything seems to work correctly except for the following detail: if the invoice has additional charges which are only subject to normal tax rate (VAT) or no tax; then during incoming invoice with MIRO the system cannot balance the accounts; always the difference is the w/t amount even though I have typed the base amount in the corresponding tab. For example, if I receive an invoice for services (no GR) with the following items (the W/T rate is 4% and VAT 16%):
Amount subject to W/T and VAT: 4,600
Other charges (no tax): 194
VAT amount: 736
W/T amount (calculated): 184
Net invoice amount: 5,346
If I type 5346 in the amount field and 4600 in the base amount for w/t then the balance is not correct (difference of 184), unless I type 5530 in the amount field (the others values are calculated correctly).
Am I doing something wrong or missing configuration?
Thanks in advance
JAL

Hi,
The amount payable to vendor is 5346 (ie Gross bill of 5530 (less) withholding tax 184). In the header data, let the amount be maintained as 5530. In the withholding tax tab, change the withholding tax base amount to 4600 and the withholding tax amount as 184. This withholding tax amount gets reduced from the vendor bill of 5530.
On simulation, you can see the screen as per your requirement.
Regards
Hari

Hi downpayments- withholding tax

Hi Gurus,
i updated the vendor master record with withholding tax invoice and payment detials.
i deducted withholding tax in case advance and invoice also.
i adjusted that in f.54.
Now i want make payment to vendor, the withholding data regarding payments should removed in vendor master record or not. Please guide how we do updated in vendor master record in case of downpayment and invoice, how we remove tax codes in master record.
it's urgent please guide us.
Regards
Rajesh.P

Hi,
While doing invoice verification itself, you are suppose to remove tax codes related to payment. Since you have already posted invoice, now you can't do any thing except pay the balance amount to the vendor without selecting open item, once payment is over, clear through F-44 afterwards.
Hope this will solve your proble, assign points if useful
Sarma BH

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

Withholding Tax(TDS) on Advance(F-48) and On Final Payment-F-53

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