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Withholding Tax type tax names can have multiple rates, effective date ranges, tax amounts limits, and taxable amount limits. You can also link a tax authority supplier to a Withholding Tax type tax name so you can create invoices to pay taxes you withheld from your suppliers

You define the Tax Name Defaults hierarchy in the Payables Options window to determine the order in which Payables will search for tax name defaults when a document requires a default. See: Defaulting Tax in Payables.

You can assign tax names to expense or asset accounts so that Payables will automatically enter the appropriate tax name when you enter an account. For more information see: Deriving Tax From an Account.

If you use automatic tax calculation in Payables, when you enter a Sales type tax name during invoice entry, Payables uses the tax rate of the tax name to calculate the invoice sales tax and automatically create tax distributions. You do not need to define special tax names for distributions that include tax. Simply check the Includes Tax distribution check box when you enter the distribution, and Payables will adjust the calculation. See: Automatic Tax Calculation Overview.

During Approval, Payables uses the Tax Name to validate that you have entered tax distributions correctly. See: Tax Amount Verification During Approval.

Defining Tax Names

Prerequisites

   Define tax types. See: QuickCodes.

   Define accounts. See: Defining Accounts.

   To define tax names for Sales, Use, Offset, and User-defined invoice taxes:

1. In the Tax Names window, enter a unique Tax Name. Enter the Tax Type, and Description of the tax name. Enter the tax rate percentage. For example, if this is a 5% tax, enter 5. Enter the account to which you will charge this tax. If you want to inactivate this tax on a certain date, enter an Inactive Date. For detailed information on any field, see Tax Names Window Reference.

2. Save your work.

Defining Tax Names for Withholding Taxes

Prerequisites

   (Optional) Define AWT Rate Types. See: QuickCodes.

Attention: Payables uses only the Standard AWT Rate Type. If you want to use an AWT Rate Type other than Standard, you may want to customize Automatic Withholding Tax to perform special behavior based on the AWT Rate Type. See: Customizing Automatic Withholding Tax

   Define accounts. See: Defining Accounts.

   Define your tax authorities as Tax Authority type suppliers. See: Classification Region of the Suppliers window.

   Define Withholding Tax Periods if you want to be able to review on-line period-to-date amounts for a Withholding Tax type name. See: Special Calendar.

   To define tax names for withholding taxes:

1. In the Tax Names window, enter a unique Tax Name. Enter Withholding Tax as the Tax Type, and enter a Description of the tax name. Do not enter a Rate. Enter the Account to which you will charge this tax. If you want to inactivate this tax on a certain date, enter an Inactive Date. For detailed information on any field, see Tax Names Window Reference.

2. Choose the Withholding Tax Details button to navigate to the Withholding Tax Details window. Enter the Tax Authority name or tax authority supplier number, and tax authority supplier site.

Enter a withholding tax period Type if you want to be able to review online period-to-date withheld amounts for this tax name.

If you want to limit the amount withheld for each period, enter a Period Limit.

If you want to enter amount limit ranges in the Tax Rates region, define an Amount Basis (Gross or Net), and a Period Basis (Invoice or Period).

If you want to automatically create a tax withholding group for this tax name, select the Create Tax Group check box.

3. In the Tax Rates region, enter rates and optionally set ranges for effective dates or amounts. Enter the rate Type, and any effective dates for the rate. Enter one or both Amount Range fields if you want to set upper and/or lower amount limits for taxable amounts or tax amount.

Enter the rate percentage for the tax name you are defining. For example, if this is a 5% tax, enter 5. Enter any comments for your future reference.

Attention: You can define your own AWT Rate Types in the QuickCodes window. Payables uses only the Standard AWT Rate Type. If you want to use an AWT Rate Type other than Standard, you may want to customize Automatic Withholding Tax to perform special behavior based on the AWT Rate Type. See: Customizing Automatic Withholding Tax.

4. Save your work.

See Also

Entering Taxes on Invoices

Defining Tax Names to Meet French VAT Requirements

• DEB/M

• DEB/M-1

• CRE/M

• CRE/M-1

Prerequisite

   In the QuickCodes window define the four tax types listed above. See: QuickCodes.

   To define tax names to meet French VAT reporting requirements:

• Define tax names as usual, but use one of the four tax types listed above as the Tax Type.

See Also

Tax Names Window Reference