Withholding Tax Payables Options

Use Withholding Tax. Select this option to enable Automatic Withholding Tax. If you enable this option, you have the option to allow your suppliers and supplier sites to be subject to withholding tax. Allow Manual Withholding. Enable this option to allow manual creation and adjustments of Withholding Tax type distributions for your invoices. Tax Group. The name of the withholding tax group that you would like to use as the default withholding tax group for the new suppliers you enter. Apply Withholding Tax. Select the time at which you would like Payables to apply withholding taxes to your supplier's invoices:

Never At Invoice Validation Time. Note: If Payables withholds tax at Invoice Validation, it calculates withholding only once. If you adjust an invoice after you submit Invoice Validation, then you need to manually adjust the withholding tax.

At Payment Time. When you create payments in a payment batch or with a Quick payment. At Invoice Validation and At Payment Time. Indicates when the Withholding Tax is applied, that is at the time of both Invoice Validation and at the Payment.

Withholding Amount Basis.

Include Discount Amount. Payable includes the invoice discount amount when it calculates withholding tax amounts for the invoice. Include Tax Amount. Payable includes the invoice tax amount when it calculates withholding tax amounts for the invoice.

Create Withholding Invoice. Select the time at which you would like Payables to automatically create withholding tax invoices to remit withheld taxes to tax authorities:

Never. You can create a withholding type tax code without entering a tax authority. However, if you change to an option other than Never, you will need to manually ensure that each withholding type tax code has an associated tax authority. At Invoice Validation Time. At Payment Time.

Include Income Tax Type on Withholding Distributions. If you enable this option then you can report on federal income tax withheld (MISC4) for 1099 suppliers.

When this option is enabled, then when Payables automatically creates distributions of type Withholding Tax for 1099 reportable suppliers, Payables automatically provides the following values:

Income Tax Type value of MISC4. Income Tax Region value, if the Combined Filing Payables option is enabled. Note: Payables provides these values only for distributions it creates automatically. If you create a Withholding Tax distribution manually, then you need to enter these values manually.

When you enable this option, Payables initiates the Update 1099 Withholding Tax Distributions program, which updates these values on existing Withholding Tax distributions. The program selects distributions to update as follows:

If the current date is before March 1 of the current calendar year then the program updates distributions with a payment date of January 1 of the previous calendar year or later. If the current date is March 1 of the current calendar year or later, then the program updates distributions that have a payment date of January 1 of the current year or later.

WITHHOLDING TAX:

1).Create Special Calendar

Save it. 2). Create Tax Authority as Supplier N: Supplier Entry Click on Create Supplier Give supplier name & Click on Apply Select Organization tab & Select Type as TAX AUTHORITY

Select Tax Details Tab & Enable Allow Withholding Tax

Click on Address Book & Create Address details(Site) Select Address purpose as Payment Click on Continue

Now enable Allow Tax Withholding at Site level Go to Tax Details tab, page below us can see the site. Enable Allow Tax Withholding

3).Define Tax Codes

1. 2. 3. 4. 5. 6.

Select the Operating Unit Give desired Tax code Map the Withholding tax account code at GL Account Select the tax authority which created Select the Period Limit Select the Special Calendar which created

7. Give Period Limit amount 8. Select type as Standard 9. Give the Tax rate % Save it. 4). Define Payables for Withholding Tax

Save it. 5). Enable Allow withholding @ supplier 1. Select the supplier for whom WHT is applicable 2. Select the Tax Details tab & Enable Allow Withholding Tax 3. Give the Tax group which created

At Supplier site level also enable Allow Tax Withholding in the same window & Map the Tax code in Invoice Withholding Tax group tab.

Save it. Create Invoice against the Supplier Click on Validate System will calculate Withholding amount