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<ManualTopic ID="/baanerp/tc/onlinemanual/000422" xml:lang="en">
   <Header>
      <Title>Setting up withholding tax and social
		contributions</Title>
      <Keyword type="header" order="d1e1134290">
         <Level1>Withholding tax</Level1>
         <Level2>setup</Level2>
      </Keyword>
      <Keyword type="header" order="d1e1134295">
         <Level1>Social contributions</Level1>
         <Level2>setup</Level2>
      </Keyword>
      <Keyword type="header" order="d1e1134300">
         <Level1>Setup</Level1>
         <Level2>withholding tax</Level2>
      </Keyword>
      <Keyword type="header" order="d1e1134305">
         <Level1>Setup</Level1>
         <Level2>social contributions</Level2>
      </Keyword>
   </Header>
   <GeneralSection>
      <ProcedureList>
         <ListTitle>To set up withholding tax and social
		  contributions:</ListTitle>
         <ListItemHead>Set up the parameters</ListItemHead>
         <ListItem>
            <Paragraph>In the <GUIRef href="/baanerp/tc/com/tccom0100s000" role="session">Implemented Software Components (tccom0100s000)</GUIRef> session, select the <GUIRef href="/baanerp/tc/com/tccom0100s000#tccom000.uwht" role="manual">Withholding Income Tax and Social Contribution</GUIRef> check box.</Paragraph>
         </ListItem>
         <ListItemHead>Define the tax categories</ListItemHead>
         <ListItem>
            <Paragraph>If you must distinguish various types of withholding tax and
			 social contributions on your reports, define the <Link href="/baanerp/tc/glossary/glossary#000426" role="glossary">tax categories</Link> required for your country in the <GUIRef href="/baanerp/tc/tax/tctax0115m000" role="session">Tax Categories (tctax0115m000)</GUIRef> session.</Paragraph>
         </ListItem>
         <ListItemHead>Define tax base value formulas</ListItemHead>
         <ListItem>
            <Paragraph>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 <Link href="/baanerp/tc/glossary/glossary#000430" role="glossary">tax base value</Link>. For details, refer to <Link href="/baanerp/tc/onlinemanual/000424" role="manual">To define tax base value formulas</Link>.</Paragraph>
         </ListItem>
         <ListItemHead>Define the tax codes</ListItemHead>
         <ListItem>
            <List>
               <ListIntro>Define the tax codes, the tax rates, and the tax posting
				data as described in <Link href="/baanerp/tc/onlinemanual/000031" role="manual">Setting up tax registration</Link>. These details are especially important:</ListIntro>
               <ListItemHead>
                  <GUIRef href="/baanerp/tc/mcs/tcmcs0136s000#tcmcs036.ktax" role="manual">Kind of Tax</GUIRef>
               </ListItemHead>
               <ListItem>
                  <List>
                     <ListIntro>Define separate tax codes, as required, for:</ListIntro>
                     <ListItem>
                        <GUIRef href="/baanerp/tc/domains/ktax#vat" role="option">VAT</GUIRef>
                     </ListItem>
                     <ListItem>
                        <GUIRef href="/baanerp/tc/domains/ktax#income.tax" role="option">Withholding Income Tax</GUIRef>
                     </ListItem>
                     <ListItem>
                        <GUIRef href="/baanerp/tc/domains/ktax#social.contrib" role="option">Withholding Social Contribution</GUIRef>
                     </ListItem>
                     <ListItem>
                        <GUIRef href="/baanerp/tc/domains/ktax#social.cont.exp" role="option">Social Contribution (Company Expense)</GUIRef>
                     </ListItem>
                     <ListItem>
                        <GUIRef href="/baanerp/tc/domains/ktax#excl.of.withhld" role="option">Exclude from Withholding</GUIRef>
                     </ListItem>
                  </List>
                  <Paragraph>For details, refer to <Link href="/baanerp/tc/domains/ktax" role="domain">Kinds of tax</Link>.</Paragraph>
               </ListItem>
               <ListItemHead>Tax rates</ListItemHead>
               <ListItem>
                  <Paragraph>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.</Paragraph>
               </ListItem>
               <ListItemHead>
                  <GUIRef href="/baanerp/tc/mcs/tcmcs0136s000#tcmcs036.tbvf" role="manual">Tax Base Value Formula</GUIRef>
               </ListItemHead>
               <ListItem>
                  <Paragraph>For the tax codes for which you defined a <Link href="/baanerp/tc/glossary/glossary#000430" role="glossary">tax base value</Link> formula as described in Step 3, in the <GUIRef href="/baanerp/tc/mcs/tcmcs0136s000" role="session">Tax Codes by Country (tcmcs0136s000)</GUIRef> session, select the tax base formula in the <GUIRef href="/baanerp/tc/mcs/tcmcs0136s000#tcmcs036.tbvf" role="manual">Tax Base Value Formula</GUIRef> field. In one country, tax codes of the same tax
				  category must have the same tax base value formula.</Paragraph>
               </ListItem>
               <ListItemHead>Payable periodically or at invoice
				payment</ListItemHead>
               <ListItem>
                  <Paragraph>In the <GUIRef href="/baanerp/tc/mcs/tcmcs0136s000#tcmcs036.payt" role="manual">Pay Tax</GUIRef> field of the <GUIRef href="/baanerp/tc/mcs/tcmcs0136s000" role="session">Tax Codes by Country (tcmcs0136s000)</GUIRef> session, select the time 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 <Link href="/baanerp/tc/glossary/glossary#000436" role="glossary">tax settlement</Link> tax code.</Paragraph>
                  <Paragraph>LN does not include tax codes for which you select <GUIRef href="/baanerp/tc/domains/tax.payt#at.inv.payment" role="option">At Invoice Payment</GUIRef> in a tax declaration. If you pay a purchase invoice
				  for which the withholding tax is payable at invoice payment, LN automatically
				  generates a standing order to pay the tax to the collection office.</Paragraph>
               </ListItem>
            </List>
         </ListItem>
         <ListItemHead>Approve the tax codes</ListItemHead>
         <ListItem>
            <Paragraph>Before you can link the tax codes to a group tax code, in
			 the <GUIRef href="/baanerp/tc/mcs/tcmcs0136s000" role="session">Tax Codes by Country (tcmcs0136s000)</GUIRef> session, you must select the <GUIRef href="/baanerp/tc/mcs/tcmcs0136s000#tcmcs036.appr" role="manual">Approved</GUIRef> check box for each tax code.</Paragraph>
         </ListItem>
         <ListItemHead>Define a group tax code</ListItemHead>
         <ListItem>
            <Paragraph>In the <GUIRef href="/baanerp/tc/mcs/tcmcs0136s000" role="session">Tax Codes by Country (tcmcs0136s000)</GUIRef> session, define a tax code and select the <GUIRef href="/baanerp/tc/mcs/tcmcs0136s000#tcmcs036.gtax" role="manual">Group Tax</GUIRef> check box to indicate that the tax code is
			 a <Link href="/baanerp/tc/glossary/glossary#000425" role="glossary">group tax code</Link>. For a group tax code, you cannot enter
			 other tax details.</Paragraph>
         </ListItem>
         <ListItemHead>Approve the group tax code</ListItemHead>
         <ListItem>
            <Paragraph>Before you can link the tax codes to a group tax code, in
			 the <GUIRef href="/baanerp/tc/mcs/tcmcs0136s000" role="session">Tax Codes by Country (tcmcs0136s000)</GUIRef> session, you must select the <GUIRef href="/baanerp/tc/mcs/tcmcs0136s000#tcmcs036.appr" role="manual">Approved</GUIRef> check box for the group tax
			 code.</Paragraph>
         </ListItem>
         <ListItemHead>Add the tax codes to the group tax code</ListItemHead>
         <ListItem>
            <Paragraph>In the <GUIRef href="/baanerp/tc/mcs/tcmcs0536m000" role="session">Tax Codes by Country (tcmcs0536m000)</GUIRef> session, from the <Link href="/baanerp/tc/glossary/glossary#specific" role="glossary">appropriate</Link> menu, select <GUIRef href="/baanerp/tc/mcs/tcmcs0536m000#start.tax.codes.by.group" role="command">Tax Codes by Group</GUIRef>. The <GUIRef href="/baanerp/tc/tax/tctax0139m000" role="session">Tax Codes by Group Tax Code (tctax0139m000)</GUIRef> session starts.</Paragraph>
            <Paragraph>In the <GUIRef href="/baanerp/tc/tax/tctax0139m000" role="session">Tax Codes by Group Tax Code (tctax0139m000)</GUIRef> session, click <GUIRef href="" role="manual">New</GUIRef> to add
			 the tax codes that you defined in Step 3 to the group tax code.</Paragraph>
            <Paragraph>You must link one tax code of the VAT kind. The tax codes
			 must have the <GUIRef href="/baanerp/tc/mcs/tcmcs0136s000#tcmcs036.appr" role="manual">Approved</GUIRef> status. If you click the browse arrow of the <GUIRef href="/baanerp/tc/tax/tctax0139m000#tctax039.cvat" role="manual">Tax Code</GUIRef> field, LN only lists tax codes that you can add to the group tax code.</Paragraph>
         </ListItem>
         <ListItemHead>Set up default group tax codes for your business
		  partners</ListItemHead>
         <ListItem>
            <List>
               <ListIntro>Link the group tax code to the <Link href="/baanerp/tc/glossary/glossary#000424" role="glossary">tax classification</Link> in one of these sessions:</ListIntro>
               <ListItem>
                  <GUIRef href="/baanerp/tc/tax/tctax1100m000" role="session">Tax Exceptions by Country (tctax1100m000)</GUIRef>
               </ListItem>
               <ListItem>
                  <GUIRef href="/baanerp/tc/tax/tctax1101m000" role="session">Tax Exceptions by Country Set (tctax1101m000)</GUIRef>
               </ListItem>
            </List>
            <List>
               <ListIntro>You can only select a group tax code if you enter these
				details:</ListIntro>
               <ListItem>The <GUIRef href="/baanerp/tc/tax/tctax1100m000#tctax100.oorg" role="manual">Order Origin</GUIRef> must be <GUIRef href="/baanerp/tc/domains/tax.oorg#purchase" role="option">Purchase</GUIRef> or <GUIRef href="/baanerp/tc/domains/tax.oorg#purchase.inv" role="option">Purchase Invoice</GUIRef>.</ListItem>
               <ListItem>The <GUIRef href="/baanerp/tc/tax/tctax1100m000#tctax100.bpcl" role="manual">Tax Classification</GUIRef> field must be filled.</ListItem>
            </List>
            <Paragraph>If you save the data, LN verifies that the
			 group tax code contains tax codes of the kinds of tax that correspond with the
			 selected tax classification.</Paragraph>
            <Paragraph>In the <GUIRef href="/baanerp/tc/tax/tctax0100m000" role="session">Tax Parameters (tctax0100m000)</GUIRef> session, select <GUIRef href="/baanerp/tc/domains/tax.src1#exception" role="option">Exceptions by Country</GUIRef> or <GUIRef href="/baanerp/tc/domains/tax.src1#exception.set" role="option">Exceptions by Country Set</GUIRef>, as applicable, in the <GUIRef href="/baanerp/tc/tax/tctax0100m000#tctax000.sro1" role="manual">Search Sequence 1</GUIRef> field.</Paragraph>
         </ListItem>
         <ListItemHead>Set up the business partners for withholding tax and social
		  contributions</ListItemHead>
         <ListItem>
            <Paragraph>Set up the details for your business partners as described
			 in <Link href="/baanerp/tc/onlinemanual/000431" role="manual">To set up business partners for withholding tax and social contributions</Link>.</Paragraph>
         </ListItem>
      </ProcedureList>
   </GeneralSection>
   <RelatedTopics>
      <SectionTitle>Related topics</SectionTitle>
      <RelTopic>
         <Link href="/baanerp/tc/onlinemanual/000420" role="manual">Withholding tax and social contributions</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/tc/onlinemanual/000031" role="manual">Setting up tax registration</Link>
      </RelTopic>
   </RelatedTopics>
</ManualTopic>