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Withholding Tax Base Amount calculated as if all items of Invoice are eligible to Cash Discount

Former Member
0 Kudos

Greetings!

I have the following problem:

Withholding Tax Type is configured in Calculation:

Base Amount > Net Amount

Cash Discount > Cash discount calculation before w/tax calculation

Problem scenario:

We entered an invoice (through MIRO with PO) for a total of 51,000 usd that have two items:

1.- 50,000 usd

2.- 1,000 usd

During MIRO we specified that only item 1 (50,000 usd) is eligible to a Cash Discount that would be of 3%.

Cash discount is being calculated correctly with an amount of 1,500 usd (3% of 50,000).

But during the Payment Run (F110) the Withholding Tax Base Amount calculated by the system is 49,470 usd (51,000 usd - (51,000*3%)).

As during in MIRO the item 2 (1,000 usd) was entered specifying it is W/o Cash Discount then the expected result should be:

A Withholding Tax Base Amount of 49,500 usd (51,000 - (50,000*3%)) instead of the 49,470 usd.

System is calculating a W. Tax Base Amnt as if all items of Invoice are eligible for a Cash Discount when that is false. Some items (as #2) are not eligible for a Cash Discount from Vendor...

Thank you!

Accepted Solutions (0)

Answers (1)

Answers (1)

suma_mani
Active Contributor
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Hello Arturo,

As per my knowledge ,both line items having cash discount payment term's in FI document. Withholdign settings as follows in my system. I tested and got results,

1. Withholding tax type create under payment & selected base amount as Net

2. Select second radio button C/dis pre withholding tax.

Regards

Mani Kumar

Former Member
0 Kudos

Thank you Mani Kumar,

But that's what we already have in customizing:

The problem is that during Invoice Verification (MIRO) we specified that only one of the items is eligible to Cash Discount (we set for item #2 that it is W/o Cash Discount😞

The invoice is posting correctly identifying the correct disc. amount of 1,500 (50,000*3%):

The problem is during the Payment Run where the system determines a Cash Discount that applies but when calculating the W/Tax Base Amount it do the following:

51,000*3% = 1,530

W/Tax Base = 51,000 - 1,530 = 49,470 usd

F110 Proposal generated:

It is false that the Cash Discount applies to all items, the expected result should be:

(only eligible items for Cash Discount) 50,000*3% = 1,500

W/Tax Base = 51,000 - 1,500 = 49,500 usd not 49,470

Thanks