Witholding Tax on Rebate Credit Memo

[Former Member]

Hello SD gurus,

Anyone has an idea on how I could deduct witholding tax on my rebate settlement credit memo?

Thanks in advance.

Rose

[Former Member]

Dear Rose,

Although you can have wayaround for the TDS linked to your Customer by creating the same Customer as a Vendor and then linking that Customer with the Vendor in Customer Master (& Vice Versa) --> Control data --> Vendor field but why do you have TDS on Rebate Credit Memo.

Can you elaborate on the scenario?

Regards,

N

[Former Member]

Hi there!

Business requires that when they issue a rebate credit memo to customer, system should be able to calculate witholding tax of 4%. The government requires them to deduct the 4% from the amount to be received from the customer and give the amount to the govt.

I wonder why its not possible to calculate witholding tax on credit memo but its allowing for invoice docuemnt.

Thanks so much for your help.

Best regards,

Rose

[Former Member]

Hi Rose Sioson,

It's a good question.. But normally I have gone through the scenarios where the total outstanding from the customer is collected and the rabate amount payment is handled separately, and this codition I have tested and it works....

I have NOT seen this scenario where a credit memo is issued for the rebate amount and the withholding tax is captured in the credit memo itself. I don't think this can be configured in SD.

[Former Member]

Hi everyone!

Need your input badly. Do you think it is possible in SD?

Thanks for your help.

Rose

[Former Member]

Hi Rose

I think it should be possible although I have configured Withholding Tax for incoming payments (and it is working the way I want it to in F-28) but not for Rebate Credit Memos.

Configuration of withholding taxes is in the FI Consultant's domain although the SD Consultant needs to do some configuration from his side. Broadly, you need to assign the Withholding Tax Codes and Withholding Tax types in the Withholding Tax Tab of the Customer Master; assign Requirement No: 83 against the Withholding Tax Condition Type in V/08 and maintain Condition Records in VK11. The actual Withholding Tax rate flows from the FI side settings. (more specifically on the Rate you maintain in the 'Define Withholding Tax Code' - Financial Accounting New --> Withholding Tax --> Extended Withholding Tax --> Calcualtion --> Define Withholding Tax Codes).

You may want to ask your FI Consultant to have a close look on the documentation in the Withholding Tax menu under Financial Accounting Global Settings (New).

Regards

Ramana ND

[Former Member]

Hi there!

Thanks so much for all your inputs. I really appreciate it. I've also found OSS NOte 178824 and it explains just like what you've said.

I'm still doing some series of test..

Hopefully it will work.

Again, thanks so much!

Rose

[Former Member]

Hi Ramana!

Do you know any other way we can do it? I've been trying to test the scenario on invoices and it is working but NOT on credit memo in F-28. I've been reading documentations on witholding tax but it is never mentioned that it can only be applied on invoice and not on CM. All related config on FI and SD has already been set... still its not wokring.

Please help.

Rose

[Former Member]

Hi Rose

I had configured the Withholding Tax for Incoming Payments. What you need to check is if the Withholding Tax is flowing when you do a F-31 (Post Outgoing payments) and not F-28 (Post Incoming Payments) when you are referring to Withholding Tax on Rebate Credit Memo.

The withholding Tax configuration should essentially be the same except that you need to treat this as payment against Credit Memo as done to your Vendor and use a different tax Code (similiar to the Tax withheld when making Payments to the Vendor). Your FI consultant should be able to help you on this one.

Unfortunately, there was no withholding Tax involved on Credit Memo with my User and so cant say it with certainity. I will check this out over this month-ending when my Agreement calendar permits settlement. Perhaps other Users may be willing to share their experience on this Forum and help you out.

Regards

Ramana ND