Withholding tax (Dr) as a special Entry

[former_member795356]

I need your Cooperation in one another Tricky Requirement Raised by my client, A resource wants a Entry like with thus for withholding tax

Expenses Dr

Withtax Dr

Vendor CR

But Actual system only generate this entry

Expenses Dr

Vendor CR

Withtax CR

I didnt find any solution to make this credit (special) type to be debited.

Any Expert here to help me........

MAZ

[Former Member]

The below entry does nt make sense:-

Expenses Dr

Withtax Dr

Vendor CR

Can you please elaborate the business transaction/ scenario needed for this? So that an alternative can be suggested.

Regards,

SDNer

[former_member795356]

or E.g

My Client wants the system to calculate Withholding Tax on purchase of Air Ticket from his Agent

Travel expenses xxxxx

Vendor - Air travel agent xxxx

Note 2 : WHT collected by the vendors on purchase of the air ticket and recorded as an asset for onwards claim from Tax Authority.

The system simulates the following accounting entry: (Payment)

Vendor XXXXXX

WHT Asset** XXXXXX

Bank XXXXXX

In This Case this entry is not Correct . It should be

Vendor XXXXXX

WHT Asset XXXXXX

Bank XXXXXX

Hope you got my requirement

[ravichandran_iyer]

This is not directly available in SAP. What you are asking is an entry that is available for customers, not Vendors.

You need to enable WHT offsetting function. In the WHT code, put the posting indicator as '3' and then set a GL Account for WHT offsetting entry in customizing. This creates an entry as follows :

Expenses DR 100

WHT clearing DR 10 (or any account that you define for offset)

Vendor CR 100

WHT payable CR 10.

For Vendors, WHT cannot be a Debit value as you have to pay to the Govt. Payable Account is always a CR value, which is set off by remittance to Govt. You can only offset and absorb it as an expense to your books of accounts if Vendor is not subjected.

Ravi.

[former_member795356]

Thanks for your kind reply.....I have already checked the off-setting scenario but this is not solving our issue. as I need not offset this entry . This is Very Special Case. I have a solution of this that i can change the - sign to + while making payment (Run time). but my customer want us to configure it at backend end.