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Former Member

Withholding Tax threshold limit consideration together with Invoice and Down payment for India

Dear Friends

I am posting the same question again as my earlier-question (https://archive.sap.com/discussions/thread/3942047) was archived but still I am looking for the way to setup Withholding Tax (WHT) threshold limit together on 'Down payment+Invoice' for India requirement

Detailed requirement with Example :

Condition : In India, WHT should be calculated on Invoice / Payment whichever is earlier!

We have different threshold limits for each tax type/code (1,50,000 / 180000 / …) and in SAP WHT calculation is defined separately for Invoice, Payments. Which means WHT will be calculated either Payment/Invoice amount once after crossing the threshold limit but not together

Example: Vendor 'X' with threshold limit of 1,80,000 has below transactions in the month of July:

  1. Invoice for 1, 20,000 – no WHT calculated as amount is within the threshold limit
  2. Down payment / Advance of 80,000 – even now no WHT calculated as Payment is less than the threshold

Expected: Considering above condition of Invoice/payment which ever is earlier for above transactions we have to put together Invoice+ DP (1, 20,000 + 80,000 = 2,00,000) then Vendor is already crossed the threshold of 1,80,000 hence when we post DP transaction system should calculate WHT!

Could you please suggest how do we achieve above expected within the standard Extended WHT setup?

After referring in to few of the discussions, and OSS it looks we can achieve above scenario with 'TAN based' exemption. But in TAN based exemption, we have to remove the standard 'accumulation method' in Withholding tax type and specify the validity dates (starting from date, to date;) in Vendor master

The said threshold is for yearly if we remove accumulation and use TAN based exemption then how do we add exemption on yearly base?

https://blogs.sap.com/2013/12/12/tan-based-exemption-for-india-withholding-tax-calculation/

https://blogs.sap.com/2014/06/02/tan-exemption-process-in-vendor-master/

Thanks in advance for your comments and any workaround

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2 Answers

  • Nov 28, 2016 at 08:45 AM

    Hi,

    You have to maintain exemption details every year in the vendor master. Then only you will get desired results.

    Regards,

    Mukthar

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    Former Member
    Dec 29, 2016 at 06:57 AM

    Thanks Mukthar,

    This is India legal requirement I hope many of people may have experienced the same, Lets see if any workaround/recommendations from the group

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