3734229 - Double deduction of withholding tax (TDS) at invoice and payment stages

TDS is deducted at both the invoice stage (4Q) and the payment stage (5Q) during the Automatic Payment Program.

SAP S/4HANA Cloud Public Edition

1. Maintain the supplier master record with withholding tax codes 4Q (invoice-based) and 5Q (payment-based) as active.
2. Create a supplier invoice using the 'Create Incoming Invoices' or 'Create Supplier Invoice – Advanced' app.
3. Observe that 'TDS' under withholding tax code 4Q is deducted at the time of invoice posting.
4. Execute the 'Manage Automatic Payments' app.
5. Observe that 'TDS' under withholding tax code 5Q is deducted again for the same invoice.

Both invoice-based (4Q) and payment-based (5Q) withholding tax codes are active in the supplier master data. As per standard system behavior, each withholding tax code is evaluated independently. Therefore, TDS is deducted at both the invoice and payment stages. 

• During supplier invoice posting using the 'Create Incoming Invoices' or 'Create Supplier Invoice – Advanced' apps, remove the payment-based withholding tax code (5Q) from the withholding tax selection.
• This ensures that the payment-based withholding tax is not considered during the automatic payment run in the 'Manage Automatic Payments' app.

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