3244451 - Error Message when Clearing a Down Payment: 'Withholding tax code of down payment differs from those of other items'

A down payment request has been created for the supplier. This down payment request has withholding tax included. A payment was done to the supplier and cleared with the down payment request, which generated a Down Payment document.

The down payment was partially cleared against invoice but there is a remaining open amount for in the Down Payment, because the down payment was made with a too high amount.

Since you sent a too high bank transfer, the supplier returned the difference (overpaid amount) via an incoming bank transfer. This amount was received via the bank and booked directly to the supplier account. Now, when you try to clear the remaining balance in the down payments with the incoming refund from the supplier, an error is raised: 'Withholding tax code of down payment differs from those of other items'

SAP Business ByDesign.

1. Go to Payables work center.
2. Go to Supplier Accounts view.
3. Open supplier account monitor for the respective supplier.
4. Select the Down Payment and the Incoming Payment from the supplier.
5. Click Clear Manually.

The following error message is raised: 'Withholding tax code of down payment differs from those of other items'

The error message is a proper system check. The system cannot clear a down payment containing withholding tax with a payment that does not have withholding tax.

There are couple workarounds that can be applied to clear the remaining balance and the payment:

1. create another supplier invoice with the difference and same withholding tax code and clear against the down payment.
2. create a new Charge/Credit to clear against the incoming payment.

OR you can redo the scenario without withholding tax and later do a manual tax posting:

1. Cancel the partial clearing between the down payment and invoice. Down payment and invoice becomes Open Items.
2. Cancel the clearing between the down payment request and payment order. The outgoing payment order remains open.
3. Cancel the invoice.
4. Cancel the down payment request.
5. Deactivate withholding taxes for this supplier (Financial Data -> Taxes).
6. Re-create the down payment request and the invoice without withholding tax.
7. Clear the down payment request against the original outgoing payment.
8. Clear the resulting down payment against the new invoice.
9. Clear the remaining balance of the new down payment against the incoming payment.
10. Adjust any withholding tax entries via manual withholding base amount tax entry, under Tax Management.

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