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Withholding Tax Not Posting Correctly

tatenda chigw edere asked Nov 15, 2012 | Replies (9)

Hi Guys

Gethave configured It's Free tax for vendors in theXsystem. The client withholds 10% I Answers - withholding
tax looking for SAP Accounting help, sign vendors. When i make an outgoing payment If you're at payment level for non registeredup and take advantage of 23,126 SAP professionals who are here to help with withholding tax, say base amount is $4000, withholding tax 10%, the posting goes you.like this:
Your email address JOIN Related Discussions Withholding tax Withholding Taxes Join Clear Advance Payment Amount from Vendor Account Calculation of Withholding Tax Witholding Tax - post entries with same vendor Service Tax Configuration Define Rounding Rule for Withholding Tax Type Oracle Payables Witholding Tax Accounting Entries

CR Bank a/c 4000 DR Vendor 400 DR Vendor 4000 New to Toolbox? Ask A Question CR Witholding tax account 400

I expected the system to debit the vendor with 3600, and credit withholding tax account 400, whilst debiting bank with 4000. Please assist where the problem is. Regards Tatenda
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9 Replies
nidhi jain replied Nov 16, 2012

Hey What is Pay amount to vendor For Example 4000 withholding tax 10% on base 400 that means it's working Right ... You have to tell Base amount than system will calculate other taxes on base .. Thanks, Rajesh

vasu allam replied Nov 16, 2012

Dear , Probably posting indication in with holding tax code is not set correctly. check and enter correct posting indicator . probably your problem will be solved. A.Vasu

tatenda chigw edere replied Nov 19, 2012

Dear Vasu, Could you kindly explain what you mean by posting indication. Where do I do such configuration for posting indication? Kind regards,

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Tatenda

AR_parab replied Nov 19, 2012

Hello Tatenda, you might have maintained the Posting Indicator 3 for your WTCode in table V_T059Z set this indicator as 1 then the posting will be Vendor A/c Dr To bank A/c To Withholding Tax A/c since you are deducting Tax there is No need to maintain Offsetting A/c for your Wtax Code offsetting A/c is only required for Posting Indicator 3 Please check the Configuration Regards Anand

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tatenda chigw edere replied Nov 19, 2012

Hi Anand, Thanks for your response. My posting indicator is 1 and I didn't maintain an offsetting account. But it still surprisingly making the following double entry: CR Bank 4000 CR Withholding tax account 400 DR Vendor 4000 DR Vendor 400 This doesn't look right. I expect it to CR bank 4000 Debit Witholding tax 400 DR Vendor 3600

Ramana Gottipati replied Nov 20, 2012

Dear Tatenda, Firstly sorry if my understanding is wrong. I had a doubt, can you please let me know why are you trying to Debit the Withholding Tax? Withholding tax is a liability that needs to be cleared subsequently. How can we debit the same. It is not something like a Discount. And presently you are paying only 3600(where actual Liability to a Vendor is 4000 and less the Withholding Tax of 400), then the Bank line item should be debited with only 3600, and not 4000. Please correct me if I am Wrong. If I am correct, please let me know the correct entry that you wanted to pass. Regards, Ramana.Gottipati

tatenda chigw edere replied Nov 20, 2012

Dear Ramana

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Im sorry I made a mistake when I said it has to debit withholding tax account. You are right it should be cleared subsequently. When I post it at invoice level, the entries are as follows:

DR Expense acc 4000 CR Vendor 3600 CR Witholding tax acc 400 these entries are correct. But when it comes to payment level, the entries are coming out as follows: CR Bank acc 4000 CR Witholding tax acc 400 DR Vendor 4000 DR Vendor 400 This entry is not understandable because the configuration I did for withholding at invoice entry and at payment level are the same. Regards, Tatenda

Ramana Gottipati replied Nov 20, 2012

Dear Tatenda, I am afraid that you are selecting two Documents of a vendor by any chance? If not please make sure that you have maintained the following settings in Withholding Tax Type Configuration, in the following path: Financial Accounting (New) -> Financial Accounting Global Settings (New) -> Withholding Tax -> Extended Withholding Tax -> Calculation -> Withholding Tax Type -> Define Withholding Tax Type for Payment Posting in the IMG activity under Calculation tab, under Base amount Sub tab, Tweak

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Gross amount Radio button Under accumulation type: Tweak the Radio button of No Accumulation, (this is not compulsion, but just mentioned) in the following path Financial Accounting (New) -> Financial Accounting Global Settings (New) -> Withholding Tax -> Extended Withholding Tax -> Calculation -> Withholding Tax Code -> Define Withholding Tax Codes Under postings tab give the posting indicator '1' in the following path Financial Accounting (New) -> Financial Accounting Global Settings (New) -> Withholding Tax -> Extended Withholding Tax -> Posting -> Define Accounts for Withholding Tax to be Paid Over You have to assign the GL account only at this place and NO where else. Ofcourse you need to assign the Withholding Tax Code to company, and to the recipient types. If these things are done correctly, there should be no problem except some Execution mistake during the transaction. Or some weird transaction might have been selected. Please let me know if any further issues.. Regards, Ramana.Gottipati

antonio lima replied Nov 20, 2012

Look the tax code configuration. Maybe have been set up to no reduce amount in Vendor. Antonio

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De: mrchigs [mailto:email@removed] Enviada em: ter?a-feira, 20 de novembro de 2012 07:08 Para: antoniolima Assunto: RE:[sap-acct] Withholding Tax Not Posting Correctly Reply from mrchigs on Nov 20 at 4:05 AM Dear Ramana Im sorry I made a mistake when I said it has to debit withholding tax account. You are right it should be cleared subsequently. When I post it at invoice level, the entries are as follows:

DR Expense acc 4000 CR Vendor 3600 CR Witholding tax acc 400 these entries are correct. But when it comes to payment level, the entries are coming out as follows: CR Bank acc 4000 CR Witholding tax acc 400 DR Vendor 4000 DR Vendor 400 This entry is not understandable because the configuration I did for withholding at invoice entry and at payment level are the same. Regards, Tatenda

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