Use this activity to enter tax lines for tax withholdings on payments to the specified supplier. In the United States, this is known as Form 1099 income tax withholding.
Withheld tax amount is always calculated with the net amount of the invoice line as base. Only tax codes with the Tax Withhold tax type can be used for this purpose. A specific report code must also be defined for each tax line if the Supplement Tax Withholding is selected in Enterprise/Company/Tax Control. These report codes are used to distinguish between tax withheld for federal and state purposes. For each invoice, income tax can be withheld for the federal government and up to two states. For each invoice line, income tax can be withheld for the federal government and one state. In companies where no specific report codes are added to the tax withholding lines, there are no restrictions in the number of tax withholding lines per invoice line.
When this dialog is closed, the total amount of withheld tax is calculated and displayed in field Withheld Tax Amount for the actual invoice line. When the invoice is posted with a voucher of function group I, the withheld tax amount will also be posted on a voucher of function group U if percentage method is used for calculation of the withholding tax. The withheld tax can then posted to a separate account and the supplier debt will be reduced with the same amount. If amount table method is used for the calculation of the withholding tax there is no withheld tax posted at the moment of invoice entry. The withholding tax is posted at the moment of payment.
This activity requires that:
As a result of this activity, taxes are withheld as specified on each invoice line, when the invoice is posted. Right after the invoice is posted to a voucher of function group I, a withholding payment transaction will be started automatically, provided that IFS/Payment is installed. The postings connected to this payment transaction are created on a voucher belonging to function group U.