Classic Withholding Tax

[Former Member]

Hello Gurus-

I have an issue with withholding tax. We have set up classic withholding tax for one of our subsidiaries in Mexico. When we ship parts or any equipment from America to Mexico, it is not subjected to withholding tax. But when we (america company) does any service work in Mexico, then it is subjected to withholding tax. How to handle a situation like this? I mean, under my Mexico company code we have only one vendor set up as america company and america company provides both parts and service. For parts there is no withholding but for service there is. I have only one vendor master.

If i enter withholding tax code in the vendor master, then any purchase either parts or service will fall under withholding and if I dont how would i calculate for service?

Also, a situation arises that there is both parts and service how to handle?

Any input in this regards is highly appreciated.

Thanks,

RNarayan

[Former Member]

Thanks for the answer.

[Former Member]

Hello-

First, thanks for your replies.

I am using classic withholding tax, and it looks like there is no withholding tax types.

And, yes we use FB60 for non PO related invoices and MIRO for invoice related PO's.

Any ideas???

Regards,

RNarayan

[Former Member]

Hi Ram,

Sorry for the late reply with solution.

There is only one TDS tax code (Classic) field is available in Vendor Master. Please note that multiple tax codes can be entered for different categories in Extended Witholding Tax (EWT).

Please create whatever tax codes you require. Take the following example:

Your total Invoice amount as 20,000 and the

cost of parts is 10,000

cost of services is 10,000

If you have entered other tax code for this Vendor in Vendor Master, you can do the following method.

After entering the Header Text and GR selection, you can move the next field for Withholding TAx & system shows the existing tax code. Select & Change the tax code at transaction level through F4. Also enter 10,000 only in the base value then tax calculations are done for 10,000 only based on the selected tax code.

Try this in Dev (if you have) Server if not, please give the results.

[Former Member]

Are you using MIRO transaction for this kind of activities both Parts and Service thro PO? Are you using FB60 or F-43 for non po related transactions.

[mshokat637928]

you can create different witholding tax types for the same vendor, putting one type as 0% and the other with whatever rate you want to use.