Withholding Tax Type

In the system you use withholding tax categories to represent the various withholding taxes in a country. You define withholding tax categories in the following activities.

The withholding tax category determines the essential calculation options for extended withholding tax.

In contrast to the withholding tax category, the withholding tax code essentially only controls the percentage rate of the withholding tax.

You must enter the withholding tax category in the customer/vendor withholding tax master data and in the company code master data.

The system recognizes two types of withholding tax category depending on when the withholding tax amounts are posted: