WHT Code - Posting Indicators

[Former Member]

Hi all,

Recently i faced one requirement, for Section 195. My Client is asking that my WHT liability will be generated through one line items and offsetting account will be the expense account to which i am charging my expense. So he wants this scenario.

I have incurred Actual Expense of Rs. 1000. My tax rate is 10%. So my tax liability would be of Rs. 10. He wants entry like this:

Expense A/c Dr. 1020

To vendor A/c 1000

To TDS payable A/c 20

TDS liability will be charged to particular expense. How can i map this scenario?

Thanks & regards,

Jigar

[former_member765905]

Hi Expert,

As mentioned above, please configure the below steps:

1. Define Withholding Tax Codes - Here you need to Posting Indicator - 2 (Option) which means -

If the posting code is set to "2" ("grossing up"), the system automatically creates two withholding tax line items with opposing debit/credit signs. The withholding tax amount is then increased by the factor 1/(1-p), where p is the withholding tax rate. You cannot choose this option if withholding tax scales apply.

Option 2 ("Grossing up") is used in Argentina for foreign vendors.

Note: If you select this option, then don't select the Withholding Tax Formula Check Box.

2. Go to T-Code: OBWU, there Select the Debit/Credit, Withholding Tax Type and Withholding Tax Code Check Boxes and Select Save Button and Select Posting Keys Button and Provide Debit - 40 and Credit - 50 and Next Select Your Withholding Tax Type, Withholding Tax Code and Provide Debit as Tax Expense Account and Credit as Withholding Tax Account.

Try this steps and next post the document, which will automatically trigger the accounts,which will met your requirement...

Accounting Entry:

Expenses Account - Dr

Tax Expense Account - Dr

Vendor Account - Cr

Withholding Tax Account - Cr

Regards,

GK

SAP

[former_member207607]

Dear Jigar,

I think that it is impossible to get automatically it.

Please check by inserting the WT amount of 10 manually during the posting.

I hope this can help.

Mauri

[Former Member]

Hi,

You tell to your user put manual as per requirment base amount and WT tax amount at the time of doing entry.

Regards,

Spradip

[former_member765905]

Hi Expert,

Your requirement is possible by creating one condition type in T-Code: OBYZ, which should be assigned in your pricing procedure.

Provide Account Key and Accrual Key for the created condition type in Tax Procedure(T-Code: OBYZ)

Go to the T-Code: OB40, provide the GL Accounts with respect to your Account Key and Accrual Key, If you are assigned in Tax Procedure.

Assign Condition Type to Withholding Tax Type.

It picks automatically when you provide Tax Code in the Postings..

Regards,

GK

SAP

[former_member207607]

Dear Jigar,

if the vat rate is 10% , the 10% of 1000 is 100.

If Your wt amount has to be 10, the wt code should be defined, at the invoice time, as following:

Percentage subject to tax 100,00 %

With/tax rate 1,0000 %

Therefore You will get:

1 31 100379 Vendor 1.090,00-

2 40 444444 Consumptn, raw mat.1 A0 1.000,00

3 40 154001 Input tax A0 100,00

4 50 177000 Withholding tax 10,00-

I hope this helps You.

Mauri

[Former Member]

Hi,

I am again explaining my scenario. i have got the bill from vendor for Rs. 1000. My tax rate is 10%. I do not want to charge to vendor but my respective expense. Entry will be as follow:

Expense A/c Dr. 1010

To WHT Liability A/c 10

To Vendor A/c 1000

I hope you understood.

Regards,

Jigar

[Former Member]

Hi Jigar,

You need to do two things.

First - while creating WHT Code select '2' as posting indicator.

Second - in postings section, Define Accts for W/hold.Tax for "Gross.Up" Offsetting Entry.

This should solve your problem.

Regards,

Sanjay

[former_member207607]

Dear Jigar,

You have to define the WT type at invoice time to get Your goal.

Mauri

[Former Member]

Hi,

Thanks for you quick reply. Can you please elaborate your solution? I could not get what you said.

Thanks,

Jigar

[Former Member]

Hi Jigar,

I think this is a standard SAP process. Please go to the SPRO and you can find that you need to create the WT Type and then WT code etc..

This is pretty much a standard process. Or do you want to add something more in your explanation?

Regards.

Vikas.

[Former Member]

Dear All,

Please be advised that, in general cases, when deducting WHT, Vendor Liability reduces. but in my case, Vendor Liability will remain intact and My Expense will be charged more.

Regards,

Jigar

[Former Member]

Hi Jigar,

In WT code configuration, you have something called 'Posting indicator'. Try using the same as '3' instead of '1'

Please come back, if you need any further information.

Regards.

Vikas

[Former Member]

Dear Sir,

Again i am telling that, please be advised, for posting indicator 3, there should be following entry:

Expense Account Dr. 1000

Tax Expense Dr. 10

To Vendor A/c 1000

To TDS Liability A/c 10

Just check the difference in the entry i want and the entry you have given me. I am asking you to go to my requirement first.

Regards,

Jigar