Setting Up Withholding Tax Groups

Important:

This topic pertains to withholding tax in NetSuite accounts that do not have the SuiteTax feature enabled. If you are using a NetSuite account where the SuiteTax feature is enabled, go to Withholding Taxes in SuiteTax.

Withholding tax is no longer being updated for new features and reports in accounts that do not have the SuiteTax feature. All version upgrades of the Withholding Tax SuiteApp include fixes for reported issues only.

Tax codes that can be applied to one transaction can be combined to create a Withholding Tax Group. You can create a group of tax codes from different withholding tax types provided that these tax types have the same applicable withholding tax base and tax nexus. For example, net amount tax codes can be grouped together from the same nexus, even though they may have different tax types. The Withholding Tax Base field shows the tax base for the tax group.

To create a withholding tax group:

Setup > Withholding Tax > Tax Groups.
Click New.
Click the nexus that you are creating a tax group for.
Provide values for the following fields:
1. Name – Enter a name for this tax group. You select this name on transactions.
2. Description – Enter a description for this tax group.
3. Rate – The system automatically displays the sum of the rates of the tax codes in this tax group. This sum takes into account the percentage base that applies to the tax codes.
4. Subsidiaries – Select the subsidiaries that this withholding tax group should be available to. In the Subsidiaries field, colons separate parents (on the left) from their children (on the right). To select multiple subsidiaries, hold down the Ctrl key on your keyboard while clicking each subsidiary.
5. Include Children – Check this box to make this tax group available to children of the selected subsidiaries.
6. Withholding Tax Type – Select the withholding tax type of the tax group you are creating. You can create a new tax type at Setup > Withholding Tax > Tax Types > New.
7. Available On – Select the type of transactions that this withholding tax group can be applied to.
Add the tax codes that you want to include in this tax group.
1. In the Tax Code column, select a tax code. Tax codes in the dropdown list are filtered so that you can only choose from tax codes for this nexus that have the same applicable withholding tax base and nexus.
2. In the Basis column, enter the basis for the selected tax code. The default value is 100, which represents the full rate. If the tax rate is 10% and the basis is 100, then 10% is added to the tax group rate. But if the tax rate is 10% and the basis is 50, then only 5% is added to the tax group rate.
3. To add more tax codes, click Add and repeat steps a and b.
Click Save. The next step is to set default withholding tax codes on item, customer, and vendor records. See Setting Default Withholding Tax Codes.

Note:
When you try to edit a tax code a tax code that already belongs to a tax group, the system will warn you that any change you make to the tax code will affect the behavior of the tax group that it belongs to.

To create a withholding tax group:

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