Configuration of Withholding Tax and “Banco De La Nacion” in PERU
This article is to describe the configuration of Withholding Tax Codes for Federal Withholding Tax calculation and posting for PERU country and also to explain how to maintain “Banco De La Nacion” field for PERU vendors.
This Withholding Tax configuration is required to be done by the multi-national US Company who is doing business in PERU.
The current solution for 1099 Miscellaneous reporting, requires only Withholding tax codes for Federal reporting. Usually we are only required to report, but not pay, the withholding tax amounts to the IRS. However in some situations, in addition to reporting, you must calculate, post, and pay the withholding tax on behalf of your 1099 vendor. For this purpose, we need to define a new set of Withholding Tax Codes which enable withholding tax calculation and posting.
The withholding tax reporting program ‘RFIDYYWT’ is then able to generate an Electronic file. Refer to SAP Note 363650 for details.
Configuration Of Withholding Tax for Peru Company Codes:
IMG Path: Financial Accounting >> Financial Accounting Global Settings >> Withholding Tax >> Extended Withholding Tax >> Calculation >> Withholding Tax Codes
Country – PE
Configuration steps under Extended Withholding Tax:
- Basic Settings >> Define Withholding Tax Keys (1099)
- Calculation >> Withholding Tax Type >> Define Withholding Tax Type for Payment Posting (FE)
- Calculation >> Withholding Tax Code >> Define Withholding Tax Codes
- Company Code >> Assign Withholding Tax Types to Company Codes (for all PERU Company Codes)
- Company Code >> Activate Extended Withholding Tax (verify for all PERU company codes)
Maintaining “Banco De La Nacion” in Peru vendors:
There is a requirement to maintain “Banco De La Nacion” bank account number in vendor master, for vendors who provides Detraccion (transfer of some goods, the provision of services, construction contracts, etc.)
SUNAT (Superintendencia Nacional de Aduanas y de Administración Tributaria) is the organization which enforces customs and taxation in Peru. For PERU vendors, SUNAT provides unique bank account number to make withholding tax payments to the government. We need to maintain this bank account number in the vendor master and apply security measures.
This field can be added under ‘Additional Vendor Information’ tab on the vendor master.
- The length of this field is 11 character long and can contain only numbers.
- Banco De La Nacion is a bank account number given to the vendors who provide Detraccion (transfer of some goods, the provision of services, construction contracts, etc.)
- Payers are forced to withhold a percentage (%) of the payments made to the vendors/providers and deposit the amount withheld in the providers’ accounts opened in the Peruvian National Bank (instead of making the entire payment in favor of them).
- SUNAT provides this Peruvian National Bank (Banco De La Nacion) account number for each vendor which needs to be maintained in the vendor master.
This document helps to configure withholding tax for vendors under Peruvian company codes for the multinational company doing business in Peru country and also explains how to to maintain “Banco De La Nacion” number in vendor master for Peru vendors.
Nice explanation , Thanks for sharing knowledge .
Nice blog, a comment from my side.
Withholding and Detractions are different tax collection mechanisms, while it is required to withhold and issue a certificate during vendor payments, the Detraction on the other hand is only a vendor side afidavit issued with the invoice requesting the customer to make a tax deposit on their behalf (all this is supported in SAP Document Compliance - electronic invoicing for Peru). But notice this is the issuer account, not the recipient.
The standard SAP configuration for the bank account configuration is also supported natively: https://help.sap.com/viewer/58439eb1ca8948098aed7dfc9815a57f/6.18.15/en-US/033745008cbf42d4a008066b5c546885.html
best regards, Daniel
Is it fair to assume that in both cases - regular witholding and detractions , the calculation and accounting process and solution in SAP is the same using standard extended Witholding configuration ? Only difference is in case of detraction - the vendor tells how much to withold and deposit while in regular witholding the customer witholds and later notifies the business partner using a certificate ?