Understanding Withholding for Contractor Services

When you pay your suppliers of contractor services, you must deduct the contractor withholding amount from the payment and submit the withholding amount to the tax authority. You print a certificate for the supplier that states the amount that is withheld from the payment. Resolution RG 2682, derogates legal resolutions RG 4052 (DGI) and RG 178 (AFIP) and imposes requirements for contractor withholding.

The government establishes a threshold amount that must be reached before you begin withholding tax amounts from the payments that you make to your contractors. For example, if the established threshold amount is ARS 400,000.00, you do not withhold amounts from the payment to the contractor until you have paid your contractor ARS 400,000.00 during a fiscal year.

The JD Edwards EnterpriseOne software for Argentina enables you generate the withholding records and a withholding certificate when you process automatic payments. After you set up your system for contractor withholding and enter vouchers with associated withholding concepts, you create payment groups, write, and update the payment groups to cause the system to:

• Track accumulated base and withholding amounts.

• Generate records in the system for the withholding amounts.

• Generate a withholding certificate that you give to your contractor.

You can also enter the withholding information when you process manual payments.