Understanding Supplier Withholding in Mexico

You must withhold value-added tax (VAT) and income tax amounts from the payments that you make to suppliers of services in Mexico. After you set up the system with legal concepts, withholding concepts, withholding percentages, and other information, you enter vouchers for services. The system uses the information that you set up to associate withholding concepts and percentages with the voucher. When you use the automatic payment process to process payment vouchers, the system calculates VAT and income withholding and creates withholding vouchers. You can manually enter withholding information for manual payments. When you process automatic payments, the system generates a withholding certificate as part of the Update process. You also can generate a withholding certificate for manual payments that you process.