Understanding How to Set Up Suppliers for Withholding
If you are required to withhold a percentage of each payment to a particular supplier, you must set up that supplier for withholding. For example, you might need to withhold taxes and pay the Internal Revenue Service directly if you do not have a tax ID for a person with whom you contract services. The system deducts the percentage that you specify from each voucher that you enter. It also makes that percentage payable to the tax authority that you specify.
To set up suppliers for withholding, enter withholding information on the Tax Information tab of the Supplier Master Revision form. To stop withholding taxes for a supplier, remove the information from the Withholding Percent and Tax Authority fields.
When you enter vouchers for suppliers that have been set up for withholding, the system assigns the voucher a pay status of %, indicating that withholding applies.
If you set up withholding information for a supplier after you have already entered vouchers for that supplier, you must manually change the pay status for the vouchers to % so that the system can calculate withholding.
See Using Speed Status Change to Review and Revise Vouchers.
Country-specific information for setting up withholding for suppliers exists for many countries.