| To set up withholding tax and social contributions |  |
| To set up withholding tax and social contributions, take the following steps: Set up the parameters In the Implemented Software Components (tccom0100s000) session, select the Withholding Income Tax && Social Contribution check box. Define the tax categories If you must distinguish various types of withholding tax and social contributions on your reports, define the tax categories required for your country in the Tax Categories (tctax0115m000) session. Define tax base value formulas For tax categories for which the tax amounts are not based on the net goods value amounts, you can define the algorithm used to determine the tax base value. For details, refer to To define tax base value formulas. Define the tax codes Define the tax codes, the tax rates, and the tax posting data as described in To set up tax registration. The following details are especially important: Kind of Tax Define separate tax codes, as required, for: VAT Withholding Income Tax Withholding Social Contribution Social Contribution (Company Expense) Exclude from Withholding For details, refer to Kind of Tax. Tax rates If the tax consists of a single rate, define a singular tax code. If the tax consists of different rates on separate parts of the amount, define a multiple tax code. For example, you must define a multiple tax code for social contributions to which one or more threshold amounts apply. Tax Base Value Formula For the tax codes for which you defined a tax base value formula as described in Step 3, in the Tax Codes by Country (tcmcs0136s000) session, select the tax base formula in the Tax Base Value Formula field. In one country, tax codes of the same tax category must have the same tax base value formula. Payable periodically or at invoice payment In Pay Tax field of the Tax Codes by Country (tcmcs0136s000) session, select the moment at which you must pay the withholding tax and social contributions to the tax authorities. If the tax is payable at invoice payment, you must enter the collection office to which you pay the withholding tax and social contributions and the tax settlement tax code. ERP LN does not include tax codes for which you select At Invoice Payment in a tax declaration. If you pay a purchase invoice for which the withholding tax is payable at invoice payment, ERP LN automatically generates a standing order to pay the tax to the collection office. Approve the tax codes Before you can link the tax codes to a group tax code, in the Tax Codes by Country (tcmcs0136s000) session, you must select the Approved check box for each tax code. Define a group tax code In the Tax Codes by Country (tcmcs0136s000) session, define a tax code and select the Group Tax check box to indicate that the tax code is a group tax code. For a group tax code, you cannot enter other tax details. Approve the group tax code Before you can link the tax codes to a group tax code, in the Tax Codes by Country (tcmcs0136s000) session, you must select the Approved check box for the group tax code. Add the tax codes to the group tax code In the Tax Codes by Country (tcmcs0536m000) session, on the Specific menu click Tax Codes by Group. The Tax Codes by Group Tax Code (tctax0139m000) session starts. In the Tax Codes by Group Tax Code (tctax0139m000) session, click New to add the tax codes that you defined in Step 3 to the group tax code. You must link one tax code of the VAT kind. The tax codes must have the Approved status. If you click the browse arrow of the Tax Code field, ERP LN only lists tax codes that you can add to the group tax code. Set up default group tax codes for your business partners Link the group tax code to the tax classification in one of the following sessions: Tax Exceptions by Country (tctax1100m000) Tax Exceptions by Country Set (tctax1101m000) You can only select a group tax code if you enter the following details: The Order Origin must be Purchase or Purchase Invoice. The Tax Classification field must be filled. If you save the data, ERP LN verifies that the group tax code contains tax codes of the kinds of tax that correspond with the selected tax classification. In the Tax Parameters (tctax0100m000) session, select Exceptions by Country or Exceptions by Country Set, as applicable, in the Search Sequence 1 field. Set up the business partners for withholding tax and social contributions Set up the details for your business partners as described in To set up business partners for withholding tax and social contributions. Related topics Withholding tax and social contributions To set up tax registration |