Understanding Withholding Percentages for Mexico

You use the Work With Withholding Percentages program (P76M003) to specify the withholding percentages that the system applies for VAT and income withholding. You can set up as many records for each withholding type (VAT or income) as you need to account for all of the withholding percentages that you might need.

You specify whether the percentage applies to the gross or the taxable amount of the service. The system uses values from the Accounts Payable Ledger table (F0411) to determine the gross and taxable amounts.

The system saves the withholding percentage information to the Withholding Percentage table (F76M003). You can manually enter the data or import it from a spreadsheet.

When you create payment groups using the Create Payment Control Groups program (R04570) in the automatic payment process, the system uses the VAT and income percentages that you set up to calculate the withholding amount.