Understanding the Setup for Profit Withholdings

For the system to calculate profit withholdings, you must set up:

• UDCs.

• Profit withholding percentages.

• Fourth category profit withholding percentages.

• Suppliers exempted from profit withholding, if needed.

To meet the requirements of RG 830/00, you must consider additional setup requirements. Article 28 of RG 830/00 stipulates:

"Profits stemming from copyright use and others derived from rights protected under Law No. 11.723 will only be taxed until earnings accrued reach the amount of TEN THOUSAND PESOS ($10,000.-) during each fiscal period for each withholding agent."

"After the aforementioned amount is surpassed, payments are subject to withholdings in conformity with the calculation method set forth in articles 25 and 26. As per clause a) of said article 26, withholdings shall not be taken from payments before the previously mentioned sum was reached."

The system stores all of the taxable amounts of invoices in the Profit Withholding - Payments Done table (F76A8070) to determine when amounts surpass the annual upper limit amount.

The structure of table F76A8070 is identical to that of the Profit Withholding - Payments Done table (F760406A). Both tables are populated when payments are updated.