Include Discount Options

Use the Include Discount option on the Manage Tax Reporting and Withholding Options page to specify whether to include discount amounts in the calculation of withholding tax when the calculation point is Payment.

Select from the following options:

• No

• Yes

• Blank

No

Select No to exclude the deduction of the discount to the taxable basis for taxes.

For example, assume you have an invoice for 100 USD. The discount amount taken is 5 USD and the automatic withholding tax rate is 10 percent. If the discount amount is excluded, the automatic withholding tax amount is 10 percent of 95 USD or 9.5 USD.

Yes

Select Yes to include the discount to the taxable basis for taxes.

For example, assume you have that same invoice for 100 USD. The discount amount taken is 5 USD and the automatic withholding tax rate is 10 percent. If the discount amount is included, the automatic withholding tax amount is 10 percent of 100 USD or 10 USD.

Note: This setting applies only to payment time withholding. You cannot enable this setting if the Calculation Point option is set to Invoice. At the time of invoice validation the discount amount to be taken is unknown, so withholding tax is calculated on the entire invoice amount.

Blank

Select Blank for the application to apply the deduction of the discount based on the taxable basis formula definition.