TDS Exemption config
Formula based withholding tax codes are defined. When am putting exemption % in vendor master it is not working.
Please help to activate withholding tax exemption rate for specific vendor.
MAURIZIO BIANCOTTI replied
Dear Kuldeep Dubey,
please kindly take care of the note number 314204 that says:
If there is a withholding tax exemption (for business transactions on
the credit side to be set in the master record of the vendor / for
business transactions on the debit side to be set in the company
code-specific data for the withholding tax code), then the system uses
the reduced amounts (that is, the "Reduced withholding tax rate for
exemption" and "Decreased reduction of base amount") for the percentage
rates and the amounts for reducing the base amounts.
This means that:
If the you want to use the exemption rate in the vendor master data,
then it is not possible to use the wtax code with formula.
In that case, if withholding tax code is defined with formula, you
should delete the exemption rate in the vendor master record, and
mantain the required entries in the formula.
(i.e. if withholding tax rate is 15% and exemption is 10%, then the
reduced rate should be 13,5% -> 15* 10%= 1,5 - 15 = 13,5)
This is the system behavior.
I hope this helps.