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Withholding tax Colombia

Our subsidiary in Colombia is using withholding tax for invoice posting. When posting a vendor invoice, a withholding tax should be calculated based on the tax amount. However, the minimum amount for this withholding tax should be compared to the net amount, not the tax amount.

Does anyone know if this is really the legal requirement for Colombia? If so, can someone tell me how to set the configuration? I can change base amount, but I haven't found a way to make the minimum amount look at one base amount, and have the withholding tax actually calculate based on another.

Thanks for you help!

Moly

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3 Answers

  • Best Answer
    Posted on Dec 19, 2013 at 09:47 AM

    Hi Moly,

    Please, see note 1900313 - Colombia Legal Change for Withholding Tax adjustment

    I hope this helps you

    Regards

    Eduardo

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    • Former Member

      Dear all!

      Have you implemented the solution as per indication of Eduardo Hinojosa?

      That 1900313 SAP note is related to the Decree 0099 of January 2013 that implements a new solution for SAP to reflect the Withholding Tax for Freelancers.

      We are having an issue with Withholding Tax calculation after the modification of the UVT for 2014 (view V_J_1_T059WTK) and updating the table for Minimal tax (view FIWTV_TAX_AMOUNT).

      Any tips will be very appreciated!

      Regards,

      Daniel.

  • Posted on Dec 18, 2013 at 01:44 PM

    Hi Moly,

    Can you please elaborate your problem with some sample data ? That will be very helpful to understand your requirement.

    Thanks & Regards
    Ramesh

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    • Hi Moly,

      Thanks for the detailed explanation. Let me explain the solution by taking a simple scenario and if you find it acceptable we may explore it for other complex scenarios.

      Pkey Desc Dr/Cr Dr Cr 31 Vendor Cr 4935345 40 Cost Dr 4310345 40 VAT Dr 689655 50 WHT Cr 64655


      Here, as per your calculation, VAT has been calculated @16% on Cost and WHT has been calculated @ 1.5% on Cost . As we know WHT is calculated on Vendor payable amount, we have to create a workaround.

      1.5% on Cost = 1.29% on Cost + VAT (Considering VAT rate is 16% and WHT rate is 1.5% on Cost)
      The above % has been arrived by doing the below calculation.

      (64655 / (4310345+689655))*100 = 1.29

      So if we create a WHT code having 1.29% and use it during the above scenarios, it should give you expected result. I am not so familiar with Columbian WHT reporting and you have to check it if you are going to take reports from standard SAP.

      You have to create similar WHT codes for other scenarios.

      Hope it helps you to find you a solution.

      Thanks & Regards
      Ramesh

  • Posted on Jan 20, 2014 at 05:47 PM

    Hello everyone,

    Thank you to all for your help. Unfortunately, it didn't work and in the end we logged the issue to SAP OSS a few weeks ago.

    On Friday I left this client and moved on to the next project. At that stage, we still hadn't received an answer from OSS. Unfortunately, that means I will not be able to see the solution once they get it.

    As I won't be able to share the solution, I am closing this post.

    Kind regards,

    Moly


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