Understanding When Withholding Applies to a Small Contributor

Regulations in Argentina exempt suppliers who generate a limited amount of transactions from having VAT and profit withholding amounts withhold from the payments that you make to the suppliers. These suppliers are known as small contributors.

The AFIP maintains a website that enables you to verify if a supplier is registered as a small contributor. If a supplier is registered as a small contributor and the supplier does not exceed the annual limits on the purchases that you make from the supplier, you do not process VAT and profit withholding when you generate payments to the supplier. If the AFIP website does not show a supplier as being registered as a small contributor, you must process the VAT and profit withholdings and deduct those amounts from the payments that you make to those suppliers.

You use the Small Contrib.under Withhold Obligation program (P76A405) to add unverified small contributors to the Small Contributors that Exceeded the Limit table (F76A405), which the system uses to determine whether to apply VAT and profit withholding for small contributors.

When you process automatic or manual payments, the system accesses the F76A405 table to determine whether to process withholding for the payment. The system processes withholding for small contributors for which a record exists in the F76A405 table.

Occasionally, you might need to remove a supplier record from the F76A405 table. You use the Small Contrib. under Withhold Obligation program to delete records from the F76A405 table

See also:

• Understanding Small Contributor Withholding in Argentina.