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Change Withholding Tax Calculation Time


Business requirement is to change the time of withholding tax calculation from payments to Invoice. They want the tax to be calculated during Invoice and not during payments. Can anyone tell me what impacts would it have both functional and technical?


Ritesh Singh

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1 Answer

  • Feb 15, 2018 at 05:56 AM


    You need to create with holding tax types for Invoices and corresponding with holding tax codes. These need to be than assigned in the vendor master.Now when you book the invoices, you will have the with holding tax calculated.

    Moreever, you would also need to plan for invoices which have been posted already and how would you want to handle them. For eg, there might be an invoice which has been created in Jan 2018 and due to payment in march. That might have a tax code, which updates with holding tax on payment. So you would have to talk to your business and check on how the same would be required to be handled. Bear in mind, that there are country specific with holding tax adjustment t codes (Eg, J1INJV in India), which can be used to adjust with holding tax amount with reference to a posted document. Additionally, there are standard program to update the with holding tax code and type for posted document as well.


    Sanil Bhandari

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