Tax and Global

Get Involved. Join the Conversation.

Topic

    Mario Cura Barba
    MX Withholding tax - 2/3 of VAT amount - Is it possible to...
    Topic posted April 26, 2018 by Mario Cura BarbaRed Ribbon: 250+ Points, last edited January 30, 2019, tagged Payables 
    106 Views, 5 Comments
    Title:
    MX Withholding tax - 2/3 of VAT amount - Is it possible to provide a WTH tax on a tax line?
    Content:

    Hello,

    we need to create a WTH Tax for two thirds of the VAT amount. We expected to have a WTH tax fiel to be provided on the tax line (not only on the invoice item line).

    How can we do this?

    Regards,


    Mario

    Comment

     

    • Alexey Shtrakhov

      Are you going to pay that withholded vat amount to TAX authorities? Or are you recording this as an expense?

    • Mario Cura Barba

      Hello Alexey,

      Mexico will report it to the tax authorities.

      Regards,

      Mario

    • Alexey Shtrakhov

      hmm.. never done this combination for VAT and Withholding taxes together. Meaning that Withholding would be based on VAT tax amount.

      Maybe you can check this feature: Compounding Level Controls: Allow cross regime compounding.You have to activate it at regime level.
      I used it earlier this for standard taxes but not for combining standard and withholding...so not sure if this would work.

      Otherwise you could just make the amount for Withholding to be as VAT Tax Rate * 2/3 and then you would apply the same rules as in VAT tax caclculation to apply Withholding tax similarly as VAT...

      Allow cross regime compounding

      Option that controls whether cross regime compounding is needed for this tax regime

      None

      None

      Controls whether this tax regime is compounded based on the tax calculated from another tax regime

      • Vaughn Hunt

        Agree with the above comments Alexey.

        Have not seen this requirement. I did find this note on Oracle support that might be of use. I know it EBS but the logic will still apply I am sure. (1622896.1)

         

         

    • Stefan Zuidema

      Hi Mario, this is possible via a withholding tax applicability rule where the tax determining factor class is 'tax derived factor'. I've set this up for several countries (e.g. Pakistan). If still required, I can explain further.

      Regards, Stefan