3654961 - Withholding tax functionality missing/not available for Switzerland (Country code CH) in SAP S/4HANA Cloud Public Edition

There is a need for activating Withholding tax (WHT) for Switzerland (Country code CH).

However, in Withholding tax-related SSCUI 104225 to 104229, all of them do not support Switzerland usage.

The unsupported SSCUIs are:

104225 Define Withholding Tax Type for Invoice Posting

104226 Define Withholding Tax Type for Payment Posting

104227 Define Withholding Tax Codes

104228 Activate Extended Withholding Tax

104229 Define Withholding Tax Keys

In addition, in help portal documentation, there is only VAT processing for Switzerland, but no Withholding tax section.

SAP S/4HANA Cloud Public Edition

This is by design due to Withholding tax requirement in Switzerland.

Tax configurations in SAP S/4HANA Cloud Public Edition are country-specific, designed to meet individual countries' business and legal requirements.

In Switzerland Withholding tax only applies to HCM and payroll activities, all foreign workers resident in Switzerland (with some exceptions) have to pay Withholding tax respectively. The Withholding tax will be deducted from the employer (for detailed example see  Schweizerische Quellensteuer QST or Tax at source in Switzerland etc.).

Within the Finance area Switzerland doesn’t have a Withholding tax as such, only in the context of the Direct Federal Tax where the anticipatory tax (withholding tax) in Switzerland (see Anticipatory Tax (Swiss Withholding Tax) AT) is a tax levied at source by the federal government on the revenue from movable capital assets (particularly interest and dividends). Therefore there is no functionality to handle withholding tax in finance area in S/4HANA Public Cloud.

For additional information, see 2-073-DV-2010-d vom 24.02.2010 available under Rundschreiben zur Direkten Bundessteuer DBST | ESTV (admin.ch) (Circular for Direct Federal Tax DFT | FTA). Art. 5 Abs. 1 Bst. c VStG (ATA Anticipatory Tax Act) is for example the interest of all customer credits excluded from the anticipatory tax if the interest amount for a calendar year does not exceed 200 francs. Regarding the handling of this exemption amount, relevant SSCUIs are 103269 Define Rules for Tax Flow Calculation / 103130 Assign Flow Calculation Procedure to Transaction Flows / 106951 Define Parameters for Tax FX Adjustment.

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