3786650 - Withholding Tax Rate Not Taken from Condition Record instead Customer Master Rate Applied in FI Posting in SAP S/4HANA Cloud Public Edition

SAP S/4HANA Cloud Public Edition

1. Set up a withholding tax condition type with category W (wage withholding tax).
2. Maintain a withholding tax condition record in Create Condition Records (Sales) (VK11) a rate of 10%.
3. Maintain withholding tax information for the customer with a 3% rate in the customer master data.
4. Create and post an invoice/settlement that should calculate withholding tax.
5. Observe that the FI posting uses 3% (from customer master) instead of 10% (from VK11).

FI posting uses the withholding tax rate configured for the customer’s withholding tax type/code, while the SD condition record only determines the applicable withholding tax type/code. 

This is the expected behavior. For FI posting, maintain and verify the required withholding tax rate in the customer's withholding tax configuration/FI tax code rather than relying on the percentage maintained in condition record (VK11).

Check the following:

1. Verify the withholding tax type and withholding tax code assigned to the customer.
2. Check the corresponding withholding tax/FI tax code configuration and its applicable rate.
3. Ensure that the customer is assigned to the intended withholding tax type/code.
4. If the required FI withholding tax rate is, maintain the corresponding rate in the relevant FI withholding tax configuration.
5. Use the SD withholding tax condition to determine the withholding tax type/code that is transferred to FI.

Note: The rate maintained in condition record(VK11) does not override the withholding tax rate used by FI during the accounting posting.

SAP Help Portal: 

• Set Tax Rates - Sales app.
• Manage Business Partner app.
• Manage Customer Master Data app.

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