The withholding tax for vendor and customer should follow the Nota Fiscal items to have the AP/AR line item deducted.
The Brazilian Nota Fiscal is posted automatically by MIRO transaction code for vendor and by VF01 for customer and both have their specific calculation procedures defined in J1BTAX transaction. Usually a nota fiscal (for vendor and customers) has many items (service, material and subcontracting), and some items can have the withholding tax and others no at the same invoice or billing.
The customizing done only in FI will apply the Withholding Tax considering the AP/AR line item total amount generating a mismatch between the Withholding done in FI document with Brazilian Nota Fiscal.
This document describes the relevant configuration to connect the withholding tax type and code to the Nota Fiscal condition type to receive the amount defined in the Nota Fiscal having the accounting document posted with the same amount defined in the nota fiscal calculation procedure.
Basic settings for extended withholding tax
All configurations will be done following the SPRO -> IMG -> Financial Accounting (New) -> Withholding Tax -> Extended Withholding Tax.
The basic settings to start the definition of withholding tax configurations are the definitions done in Type level and Code level. Let´s understand the important configuration done in both of them.
The WHT Type and Code are defined by Country Code and it will be applied for the companies assigned to that country. The G/L account can be setup differently in company code level as well the assignment of withholding tax type to it.
Follow the draw bellow to understand the assignments:
This document will focus on the calculation, Withholding tax Type and Code setup to link them to the MM and SD condition type.
Setting up the withholding tax type
The initial setup is the definition of withholding tax type that will be the same for Invoice and Payment Post.
The tax amount will be informed by Nota Fiscal to FI accounting, so the Base Amount must be defined as Modified tax amount, this means that those transactions that you specified in Customizing for the withholding tax base amount are used as the tax base:
This setup will required the assignment of WHT Type to a processing key IMG -> Withholding Tax -> Extended Withholding Tax -> Calculation -> Withholding Tax Base Amount -> Define Processing Key for Modified Tax Amount
The process key defined at this moment is the account key used in the Calculation Procedure condition type.
Setting up the withholding tax code
There is two ways to go from here, receive the Base Amount and apply the WHT rate to have the amount or receive the tax amount already calculated by nota fiscal.
The first option can generate rounding difference since the WHT amount is calculated by Nota Fiscal Item number while the FI posting is calculated on the AP or AR amount.
The second option will generate the FI accounting withholding tax posting with the same amount as the Nota Fiscal, but the rate will be always set as 100%.
IMG -> Withholding Tax -> Extended Withholding Tax -> Calculation -> Withholding Tax Code -> Define Withholding Tax Codes
The example below will link the Withholding Tax Type and Code “CO” with the Tax Amount condition in TAXBRA calculation procedure, so the rate will be defined as 100% since the accounting document will receive the calculated amount to be posted: