When executing a Withholding Tax Return Run it finishes with the result No tax item exists for period XX.XX.XXXX to XX.XX.XXXX.
But as you have maintained all required data you expect that the system has calculated the withholding tax and will therefore be able to create a withholding tax return.
But when checking the Withholding tax tab in supplier invoices you notice that the withholding tax has not been calculated automatically.
Reproducing the Issue
- In your system you flagged the withholding tax indicator in the Tax Authority/ Company Tax Arrangements.
- In the Supplier Master data (Financial Data Tab > Tax Data sub tab) you maintained a country code, a withholding tax type and a withholding tax rate type.
- In the Supplier Invoicing Workcenter navigate to the Invoicing and Credit Memos view.
- Open one of the invoices for which you expect automatic withholding tax calculation
- Press View all and navigate to the Items tab. There navigate to the Taxes sub tab.
- Now go to the 'Withholding Tax Details' tab. You notice that there is no withholding tax entry visible. Therefore the withholdingt tax run could not retrieve any data.
In general, to have the withholding tax calculated automatically for a supplier invoice, the following pre-conditions need to be met:
1. Tax Authority/ Company Tax Arrangement:
Withholding Tax Indicator
- If the indicator is selected, the company will withhold taxes
- Country Code - If no entry is provided for a country, it implies that the supplier is not subject to withholding.
- Tax Type Code - A tax rate type code can be assigned for a particular country and tax type; in this case, the supplier is subject to withholding.
- In most cases, there is only one tax rate type code available because withholding tax rates do not depend on the supplier.
- Tax Rate Type Code - In some countries, there are withholding taxes where the rate is influenced by the supplier; in this case, there are multiple tax rate type codes available.
There is a third precondition which needs to be fulfilled:
- Country Code
- Tax Type Code
- Withholding Tax
- Income Type Code
A product is only subject to withholding tax if these details are provided.
In the supplier invoice the system checks the Product ID and then calculates the withholding tax accordingly.
If you maintain a supplier invoice item without product ID or with a product for which no withholding tax details are maintained, you need to maintain one more detail in the Supplier tax data, the withholding tax income type, in order to have the withholding tax calculated automatically.
- In the Supplier Base Workcenter navigate to the Suppliers view
- Select a supplier that is subject to withholding tax
- Navigate to the Financial Data Tab and ther to the Tax Data Tab
- Make sure that under Withholding Tax Classifications you maintained a Country code, a withholding Tax Type and a Withholding Tax Rate Type
- Now in the Details section maintain a Withholding Tax Income Type, ie Other Income
- Press Save and Close
- Proceed with these steps for all suppliers that are subject to withholding tax
If you now create a new supplier invoice for these supplier invoices the withholding tax will be calculated manually and you will find an entry in the Withholding Tax Details tab as described above.
The withholding tax will not be calculated for previously created supplier invoices. For these you need to manually create Withholding tax item entries:
- In the Tax Management Workcenter navigate to the Manual Tax Entries view and here to the Withholding Tax Base Amount Entries view
- Press New - Tax Entry and maintain all the relevant data.
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