<?xml version="1.0" encoding="utf-8"?>
<ManualTopic ID="/baanerp/tc/onlinemanual/000420" xml:lang="en">
   <Header>
      <Title>Withholding tax and social contributions</Title>
      <Keyword type="header" order="d1e1452824">
         <Level1>Withholding tax</Level1>
         <Level2>overview</Level2>
      </Keyword>
      <Keyword type="header" order="d1e1452829">
         <Level1>Social contributions</Level1>
         <Level2>overview</Level2>
      </Keyword>
   </Header>
   <GeneralSection ID="concept">
      <Paragraph>In many countries, in specific situations, companies are legally
		required to retain payable income tax and/or social contribution from the
		payments of purchase invoices, and pay the amount directly to the tax
		collector’s office. For example, withholding income tax and social
		contributions can apply to services provided by subcontracting companies,
		employment agencies, and self employed workers.</Paragraph>
      <Paragraph>The withheld tax and social contribution usually consists of a
		fixed percentage. In some countries, different rates apply to different
		portions of the transaction amounts. The amounts to be withheld can consist of
		combinations of income taxes and social contributions. Depending on local
		rules, the payment is due either when the invoice is paid, or periodically.
		Companies must periodically submit a report to declare the amount of withheld
		and paid tax and social contribution.</Paragraph>
      <Paragraph>In addition, in some countries part of the social contribution
		must be paid by the customer. This part of the social contribution is charged
		over the invoice amount and must be posted as extra costs, or company expenses.</Paragraph>
      <Paragraph>As a result, various kinds of tax can apply to an invoice.
		Separate tax codes are required to calculate the amounts of withholding income
		tax and social contributions, and to register the tax amounts of the invoice in
		the tax analysis. Group tax codes are used to link a number of tax codes to a
		transaction.</Paragraph>
   </GeneralSection>
   <GeneralSection>
      <SectionTitle>To register and declare withholding tax and social
		contributions</SectionTitle>
      <Paragraph>You can apply withholding tax and social contributions in
		combination with <Link href="/baanerp/tc/glossary/glossary#000338" role="glossary">value added tax (VAT)</Link> and <Link href="/baanerp/tc/glossary/glossary#000421" role="glossary">sales tax</Link>. The set up procedure is described in <Link href="/baanerp/tc/onlinemanual/000422" role="manual">Setting up withholding tax and social contributions</Link>.</Paragraph>
      <Paragraph>If you pay the tax periodically, the procedure to set up and
		prepare the withholding tax and social contributions declaration is similar to
		the set up and preparation of value added tax declarations.</Paragraph>
   </GeneralSection>
   <GeneralSection ID="payment">
      <SectionTitle>Withholding tax payable at invoice payment</SectionTitle>
      <Paragraph>If the withholding tax and social contributions is payable
		immediately at invoice payment, you must specify the collection office and the
		settlement tax code for the tax code in the <GUIRef href="/baanerp/tc/mcs/tcmcs0136s000" role="session">Tax Codes by Country (tcmcs0136s000)</GUIRef> session.</Paragraph>
      <Paragraph>When you generate a tax declaration, ERP Enterprise 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>. When you pay a purchase invoice with such a tax code, ERP Enterprise automatically
		generates a standing order in <GUIRef href="/baanerp/tf/cmg" role="module">Cash Management</GUIRef> to pay the tax to the collection office.</Paragraph>
      <Paragraph>The standing orders for withholding tax are created at the
		moment when the open invoice balance for the business partner is reduced.</Paragraph>
      <Paragraph>In the <GUIRef href="/baanerp/tf/cmg/tfcmg2504m000" role="session">Anticipated Payments/Receipts (tfcmg2504m000)</GUIRef> session, on the <Link href="/baanerp/tc/glossary/glossary#specific" role="glossary">appropriate</Link> menu, you can
		click <GUIRef href="/baanerp/tf/cmg/tfcmg2504m000#tfcmg1517m000" role="command">Withholding Tax Amounts by Payment Document</GUIRef>. This
		command starts the <GUIRef href="/baanerp/tf/cmg/tfcmg1517m000" role="session">Withholding Tax Amounts by Payment Document (tfcmg1517m000)</GUIRef> session, which displays the details of the generated
		payment documents.</Paragraph>
      <Paragraph>In the <GUIRef href="/baanerp/tf/cmg/tfcmg2503s000" role="session">Withholding Tax Amounts (tfcmg2503s000)</GUIRef> session, you can view the withholding tax
		amounts. You can use the <GUIRef href="/baanerp/tf/gld/tfgld1520m000" role="session">Tax Analysis (tfgld1520m000)</GUIRef> session to generate a report of the tax amounts paid
		at invoice payment.</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>
      <RelTopic>
         <Link href="/baanerp/tc/onlinemanual/000137" role="manual">Setting up a tax declaration</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/tc/onlinemanual/000429" role="manual">Processing tax declarations</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/tc/onlinemanual/000430" role="manual">Withholding tax postings</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/tc/onlinemanual/000455" role="manual">Withholding tax on payment postings</Link>
      </RelTopic>
   </RelatedTopics>
</ManualTopic>