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author's profile photo Former Member
Former Member

Slabwise Withholding Tax

Dear Experts,

Withholding Tax on Contractors for Bangladesh is having slapwise, where I am using the formula based withholding calculation, but the output calculation is not correct as per the slab.

In formula i have use as under;

1,00,000 0

5,00,000 1%

15,00,000 2.5%

25,00,000 3.5%

99,99,999 4.0%

Below is the client requirement

The tax rate for supplier is always calculated on cumulative amount paid in a financial year. The rate is

Payment upto 1,00,000 Nil,

Payment exceed 1,00,000 but less than 5,00,000 is 1%

Payment exceed 5,00,000 but less than 15,00,000 is 2.5%

Payment exceed 15,00,000 but less than 25,00,000 is 3.5%

Payment exceed 25,00,000 is 4%

For Example,

1) If 1st payment is 25,000, the tax is nill.

2) If 2nd payment is 90,000, then tax is

Total payment (25,000+90,000)= 115000 @ 1% = 1150

3) If the 3rd payment is 500000, then tax is,

Total payment (25,00090,0005,00,000)= 6,15,000 @ 2.5%= 15375 u2013 1150 ( earlier tax deducted) = 14225

4) If the 4th payment is 1200000, then tax is

Total payment (25000900005000001200000)= 1815000 @ 3.5% = 63625- (115014225)= 48150

5) If the 5th payment is 700000, then tax is

Total payment (25000900005000001200000700000)= 2515000@4% = 100600- (11501422548150)= 37075

Please give your valuable suggestion for the withholding settings.

Thanks in advance

Sayed

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2 Answers

  • author's profile photo Former Member
    Former Member
    Posted on Jun 01, 2009 at 05:13 AM

    Dear Sayed

    Kindly Check the following Settings in your WHT Configuration :

    1) In WHT Type Choose Gross Amount, Post W/tax Amount, Accumulation type per year starting with month 4, Base Amount and w/tax amount based on WHT Code.

    2) In WHT Code Choose Percentage subject to tax 100%, Calculation W/tax Formula

    3) In Define Formula for calculating W/tax enter :

    1,00,000 0

    5,00,000 1%

    15,00,000 2.5%

    25,00,000 3.5%

    99,99,999 4.0%

    4) Enter Receipant type as Corporate or non Corporate

    5) Assign W/tax type to CoCode and Choose W/tax agent and Activate Extended W/tax

    6) Assign W/tax type and Code to vendor master and also tick liable for deducting tax

    Hope it Solves !!

    If doesnot then tell me the error message or amount of wrong deduction

    Cheers

    IMK

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    • Former Member Former Member

      Dear all,

      I managed to find out the solution to obtain exactly the requirements and calculations above.

      Please refer to SAP OSS note 671917 for more information.

      Also, please remember to setup the following:

      1) Setup withholding tax country

      2) Setup the withholding tax type as accumulative

      3) Tick the W.Tax.Form indicator in the withholding tax code.

      Hope it helps! I found my solution and how it works for everyone who is setting up Bangladesh WHT.

      Cheers!

      Orange2

  • author's profile photo Former Member
    Former Member
    Posted on Jul 20, 2009 at 08:51 AM

    In withholding tax type, Accumulation Type select no accumalation if the limits are for each invoice.

    Ramesh

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