Witholding tax calculation with complex formula

Question

Hi Team,
Is there any solution for the below requirement in calculating withholding tax.
System should consider the below formula while calculating Withholding tax for vendor.
If the Invoice (INV) amount is Less than 800 = Tax is 0
801 to 4000  = (INV amount - 800) * 20%
4001 to 20000 = (80% of INV amount) * 20%
20001 to 50000 = (80% of INV amount) * 30%
more than 50001 = (80% of INV amount) * 40%
as per my understanding we can use withholding tax forms. but I am not able to get the above scenario. Can anybody trough the exact step to build the above formula for calculating withholding tax code.
Thanks,
Ravi

Answer 1

Hi,
You create a new WHT Type and Code for this scenario, where in for WHT code defenition, you must select indicator WHT Formula.
Now you can maintain formula for the above created type and code combination with the conditions of your requirement.
IMG -- Financial Accounting (New) -- Financial Accounting Global Settings (New) -- Withholding Tax -- Extended Withholding Tax -- Calculation -- Minimum and Maximum Amounts -- Define Min/Max Amounts for Withholding Tax Codes......Here Maintain the minimum base amount as 800...for the newly created type and code combination.
IMG -- Financial Accounting (New) -- Financial Accounting Global Settings (New) -- Withholding Tax -- Extended Withholding Tax -- Calculation -- Withholding Tax Code -- Define Formulas for Calculating Withholding Tax...............Here you maintain the below entries.
CrcyWHT TypeWHT CodeCountryValid From Date
Then select this new entry and double click on Formulas for withholding tax calculation.
There maintain your conditions.
Regards,
Srinu