3752806 - Incorrect Withholding Tax Amount During Supplier Invoice Posting — SAP S/4HANA Cloud Public Edition

Incorrect withholding tax (WHT) amount is calculated during supplier invoice posting when using a WHT code configured for gross-up.

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SAP S/4HANA Cloud Public Edition

1. Configure a withholding tax code with certain rate and set the posting indicator to 2 (gross-up).
2. Post a supplier invoice using this WHT code.
3. Observe that the calculated WHT amount is higher than the simple percentage expectation.

The withholding tax code is configured with posting indicator 2, which applies gross-up logic and increases the calculated WHT amount compared to a simple percentage deduction.

Please review the withholding tax code configuration in SSCUI 104227 Define Withholding Tax Codes. If gross-up is not intended, change the posting indicator from 2 (gross-up) to 1 or 3.

Please set the indicator according to the following instructions:

Posting Indicator:

1.If the posting indicator is set to "1", the withholding tax amount is deducted from the customer/vendor line item amount and/or bank line item, and a withholding tax line item automatically created.

2.If the posting code is set to "2" ("grossing up"), the system automatically creates two withholding tax line items with opposing debit/credit signs. The withholding tax amount is then increased by the factor 1/(1-p), where p is the withholding tax rate. Please do not choose this option if withholding tax scales apply.

3.If the posting code is set to "3", the system automatically creates two withholding tax items with opposing debit/credit signs.

FYI: Option 2 ("Grossing up") is used in Argentina for foreign vendors.

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