Withholding Tax Groups

Use this window to define withholding tax groups that include multiple Withholding Tax type tax names. You can assign the same tax name to more than one group. When you assign a withholding tax group to an invoice or distribution, Payables calculates invoice withholding tax based on every tax name in the withholding tax group. For example, you assign a withholding tax group to an invoice or distribution if you need to withhold taxes at both the local and country level, each withheld at different rates and remitted to different tax authorities. You define and assign to the invoice or distribution a Withholding Tax Group that includes both taxes.
You rank all of the tax names in a withholding tax group when you define the group. When you enter an invoice and enter a withholding tax group, Payables calculates the taxes in order of rank. Lower ranked taxes are applied to the amount of the invoice or distribution amount less the previous withholding tax amounts. For example, you define a withholding tax group with two tax names, and you give tax A (rate = 10%) a rank of 1 and tax B (rate = 5%) a rank of 2. When you assign this group to an invoice, Payables calculates the withholding tax for a $100 invoice as follows: tax A = $10, tax B = $4.50 (.05(100 - (100 * .10))).

If you want to define a withholding tax group with only one Withholding Tax type tax name, you can enable the Create Record Group option in the Withholding Tax Details region of the Tax Names window to automatically create a withholding tax group with the one Withholding Tax type tax name.

You can assign a default withholding tax group in the Payables Options window. Payables automatically assigns the Payables default withholding tax group to all new suppliers. The suppliers value defaults to any new supplier sites for the supplier. Supplier sites assign the default to any new invoices you enter for the supplier site. You can override any withholding tax group default at any time.

To create withholding tax groups:

1. In the Withholding Tax Groups window, enter a unique name for your withholding tax group, and enter a description of the group. The name and description will appear on a list of values whenever you need to select a withholding tax group.

2. If you want to inactivate this withholding tax group on a certain date, enter an Inactive Date.

3. Assign a rank to each tax name in the tax group. 1 is the highest rank. You can assign the same rank to more than one tax name. For example, if you want to use the gross invoice amount to calculate withheld amounts for each tax name, assign each tax name a rank of 1.

Enter each Withholding Tax type tax name that you want to assign to this group.

Payables automatically displays the Description, Tax Authority Name, and Tax Authority Site that are associated with each tax name.

4. Save your work.