3474751 - The Withholding Tax Net Base Amount Differs In Supplier Invoice And Outgoing Payment

For supplier invoice view and outgoing payment view, the withholding tax net base amount is not the same, and has a small difference of decimal places.

SAP Business ByDesign

First check the supplier invoice view:

1. Go to Supplier Invoicing work center.
2. Go to Invoices and Credit Memos view.
3. Search for invoice: AAA (AAA represents the invoice ID).
4. Go to General tab - Taxes tab - Withholding Tax Details.
5. The tax net base amount is 123(123 represents the tax net base amount).

Then check the outgoing payment view:

1. Go to Liquidity Management work center
2. Go to Payment Monitor view, search for payment: CCC (CCC represents the outgoing payment ID).
3. Go to Open Item tab, can see tax net base amount is 456(456 represents the tax net base amount).

The tax net base amount is different, and only has a small difference of decimal places.

The payment and supplier invoice documents are applied to different tax amount calculation logic. The supplier invoices in Business ByDesign contain aggregated tax amounts at the document level. The payment in Business ByDesign contain aggregated tax amounts at the item level. This may result in rounding differences between the tax amount calculated at the document level and item level total tax amount. The reason behind this difference is that unlike the document level, item level tax amounts are calculated as per each line item and rounded off to relevant decimal places. This method has been chosen because it is used by accounting. 

Ideally, in an accounting software, each line item is posted to general ledger separately and hence, tax amounts need to be rounded off at line item level. On the other hand, since tax authorities accept both methods of calculating tax amounts, suppliers choose to calculate and pay tax applicable to the total net price i.e. the document level tax amount. This might result in some difference between the document and the item level tax amounts. The system ensures that the total tax paid on an invoice at the end should be same as the tax amount of the actual invoice prepared by the supplier. If this difference is not distributed at the item level, it can cause discrepancies between the taxes that are being paid to the relevant tax authorities and the taxes that were declared and therefore, a supplier might end up paying less or more taxes to the tax authorities.

In order to maintain this sanity with respect to accounting, the system is designed using a certain set of rules that try to equalize the document and the item level taxes. These rules are called the rules of tax difference distribution.

System behavior.

supplier invoice, outgoing payment, withholding tax, net base amount , KBA , SRD-FIN-CLM , Cash and Liquity Managment , Problem