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<ManualTopic ID="/baanerp/tc/onlinemanual/000425" xml:lang="en">
   <Header>
      <Title>Withholding tax and social contributions - concepts and
		components</Title>
      <Keyword type="header" order="d1e1443600">
         <Level1>Tax</Level1>
         <Level2>concepts and components</Level2>
      </Keyword>
   </Header>
   <GeneralSection>
      <SectionTitle>Business partner tax classification</SectionTitle>
      <Paragraph>The Business partner tax classification is way to indicate that
		payments of invoices from an invoice-from business partner are subject to
		withholding tax and social contributions, and to group business partners that
		have the same tax aspects for your company, for example, subcontractors, or
		agents.</Paragraph>
      <Paragraph>If you set up tax exceptions, you can only select a group tax
		code if you use the tax classification as a selection criterion.</Paragraph>
      <Paragraph>In the <GUIRef href="/baanerp/tc/com/tccom4122s000" role="session">Invoice-from Business Partner (tccom4122s000)</GUIRef> session, you can select your
		suppliers'<Link href="/baanerp/tc/glossary/glossary#000424" role="glossary">tax classification</Link>.</Paragraph>
   </GeneralSection>
   <GeneralSection>
      <SectionTitle>Collection office</SectionTitle>
      <Paragraph>A collection office is an authority to which the tax or social
		contribution must be paid. In ERP Enterprise, a collection office is defined as a business partner with only
		the invoice-from and pay-to roles.</Paragraph>
      <Paragraph>You can set up tax declarations for each collection office to
		which you must report and pay tax.</Paragraph>
      <Paragraph>If the tax declaration and payments to the collection office are
		due on specific days of the month, you can define <Link href="/baanerp/tc/glossary/glossary#TermsOfPayme_tc" role="glossary">payment terms</Link> for the due dates and
		link the payment terms to the collection office.</Paragraph>
   </GeneralSection>
   <GeneralSection>
      <SectionTitle>Exclude from Withholding tax</SectionTitle>
      <Paragraph>This kind of tax code is used for invoiced expenses that are not
		subject to withholding tax but which must be reported to the collection office
		because they are related to transactions that are subject to withholding tax.</Paragraph>
      <Paragraph>For example, a purchase invoice can contain an invoice line for
		labor and one for hotel expenses. The labor line is subject to VAT and income
		tax, and the expense is only subject to VAT. For withholding tax, the taxable
		amount and the tax amount are both zero. The taxable base amount of the expense
		for VAT must be reported to the withholding collection office as ‘amount
		excluded’.</Paragraph>
      <Paragraph>For this requirement, you must define a tax code with kind of
		tax <GUIRef href="/baanerp/tc/domains/ktax#excl.of.withhld" role="option">Exclude from Withholding</GUIRef>. You cannot define tax rates or posting data for such
		a tax code. Next, define a group tax code that contains the <GUIRef href="/baanerp/tc/domains/ktax#excl.of.withhld" role="option">Exclude from Withholding</GUIRef> tax code and a <GUIRef href="/baanerp/tc/domains/ktax#vat" role="option">VAT</GUIRef> tax
		code.</Paragraph>
      <Paragraph>If you link the group tax code to a transaction, ERP Enterprise lists the taxable
		transaction amount as ‘Amount Excluded’ in the withholding tax report.</Paragraph>
   </GeneralSection>
   <GeneralSection>
      <SectionTitle>Fiscal number</SectionTitle>
      <Paragraph>A number used to identify corporate bodies as well as natural
		persons for income tax and social contribution registration.</Paragraph>
      <Paragraph>Withheld income tax and social contributions must be registered
		with the supplier's fiscal number. Your business partners must supply you with
		their fiscal number. This number can differ from their <Link href="/baanerp/tc/glossary/glossary#000336" role="glossary">tax number</Link>.</Paragraph>
      <Paragraph>You can specify the business partner's fiscal number in the <GUIRef href="/baanerp/tc/com/tccom4127s000" role="session">Business Partner Withholding Tax Data (tccom4127s000)</GUIRef> session.</Paragraph>
   </GeneralSection>
   <GeneralSection>
      <SectionTitle>Tax base amount</SectionTitle>
      <Paragraph>In some cases, withholding income tax and social contributions
		must not always be calculated over part of the invoice amount rather than over
		the full amount. To calculate the tax amounts correctly, you can define a tax
		base formula which is the algorithm ERP Enterprise uses to calculate the base amount for the income
		tax and social contributions.</Paragraph>
      <Paragraph>You can optionally define the tax base formulas for the various
		kinds of withholding income tax and social contributions in the <GUIRef href="/baanerp/tc/tax/tctax0111m000" role="session">Tax Base Value Formulas (tctax0111m000)</GUIRef> session. If you do not define a tax base
		formula, ERP Enterprise bases the
		tax calculations on the net purchase order amount or the net purchase invoice
		amount.</Paragraph>
      <Paragraph>To ensure that the tax base value is the same for the <GUIRef href="/baanerp/tc/domains/ktax#social.contrib" role="option">Withholding Social Contribution</GUIRef> and the <GUIRef href="/baanerp/tc/domains/ktax#social.cont.exp" role="option">Social Contribution (Company Expense)</GUIRef> component, the tax base value formula
		must be the same for each combination of <Link href="/baanerp/tc/glossary/glossary#000337" role="glossary">tax country</Link> and <Link href="/baanerp/tc/glossary/glossary#000426" role="glossary">tax category</Link>.</Paragraph>
   </GeneralSection>
   <GeneralSection>
      <SectionTitle>Tax category</SectionTitle>
      <Paragraph>A way to distinguish and/or group kinds of withholding income
		tax and social contributions for inquiries, reporting, and tax payment
		selections. For example, in Italy a number of social contributions are
		distinguished such as Enasarco, FIRR, ISC, SDC and INPS.</Paragraph>
      <List>
         <ListIntro>Using tax categories is optional. If you use tax categories,
		  you can define specific tax declaration masters for each combination of:</ListIntro>
         <ListItem>Tax Country</ListItem>
         <ListItem>Collection Office</ListItem>
         <ListItem>Tax Declaration Type</ListItem>
         <ListItem>Tax Category</ListItem>
      </List>
      <Paragraph>You can perform tax analysis, tax reports, and tax payment
		selections by tax category.</Paragraph>
   </GeneralSection>
   <GeneralSection>
      <SectionTitle>Tax declaration master</SectionTitle>
      <Paragraph>The definition of a specific tax declaration. You must define a
		tax declaration master for every combination of type of tax declaration and
		collection office. For declarations of withholding tax and social
		contributions, you can define separate tax declaration masters per <Link href="/baanerp/tc/glossary/glossary#000426" role="glossary">tax category</Link> if this is required.</Paragraph>
   </GeneralSection>
   <GeneralSection>
      <SectionTitle>Tax Settlement tax codes</SectionTitle>
      <Paragraph>This kind of tax code is only used to the tax declaration in the
		general ledger. If you pay the tax, ERP Enterprise links this tax code to the reversal postings of
		the tax amounts on the interim accounts and to the tax payments you make to the
		collection office. On the tax analysis reports, tax payments to the collection
		office are represented by the <GUIRef href="/baanerp/tc/domains/ktax#tax.settlement" role="option">Tax Settlement</GUIRef> tax code.</Paragraph>
      <Paragraph>You cannot assign <GUIRef href="/baanerp/tc/domains/ktax#tax.settlement" role="option">Tax Settlement</GUIRef> tax codes to transactions or add them to a group tax code.</Paragraph>
      <Paragraph>You cannot define tax rates and posting data for <GUIRef href="/baanerp/tc/domains/ktax#tax.settlement" role="option">Tax Settlement</GUIRef> tax codes.</Paragraph>
   </GeneralSection>
   <RelatedTopics>
      <SectionTitle>Related topics</SectionTitle>
      <RelTopic>
         <Link href="/baanerp/tc/onlinemanual/000422" role="manual">Setting up withholding tax and social contributions</Link>
      </RelTopic>
   </RelatedTopics>
</ManualTopic>