Setting Up Withholding Tax
Prerequisite
(Optional). You may want to customize Automatic Withholding Tax to perform special behavior based on your local requirements. For example, you may want to use a Penalty AWT Rate Type for a specific supplier. Or, you may want to round all calculated withholding tax amounts up to the nearest dollar. If you want Automatic Withholding Tax to perform any special behavior, customize your AP_CUSTOM_WITHHOLDING_PKG. See: Customizing Automatic Withholding Tax.
To set up Payables for automatic withholding tax:
1. To allow Automatic Withholding Tax for your employee expense reports and supplier invoices, enable the Use Withholding Tax Payables option. Choose your other withholding tax Payables options. See: Withholding Tax Payables Options.
Attention: Automatic Withholding Tax cannot be used if Automatic Offsets is enabled.
2. Create a unique Pay Group for each tax authority. See: QuickCodes.
3. Enter each tax authority as a supplier, with supplier Type Tax Authority. Assign the appropriate unique Pay Group to the supplier. See: Entering Suppliers.
4. Create a Payment Format that uses the Tax Authority Remittance Advice as its Separate Remittance. See: Payment Formats.
5. For the appropriate bank(s), in the Payment Documents window, create a payment document that uses a Computer Generated or Combined Disbursement type, and uses the Payment Format with a Tax Authority Remittance Advice. See: Defining and Maintaining Payables Payment Documents.
6. Define your Withholding Tax type tax names and tax rates. Assign tax authority suppliers to the tax names. See: Tax Names.
7. To allow automatic withholding of multiple taxes per expense report or invoice, define your withholding tax groups. See: Withholding Tax Groups.
9. Define withholding tax exemptions and rate exceptions for all of a supplier site's invoices or for specific invoices of a supplier site. See: Maintain Tax & Certificates.
