3787499 - Payment withholding tax is deducted again for uploaded supplier open items after running "Adjustment of Withholding Tax Information to Relevant Type"

• After uploading supplier open invoice balances using the migration process, payment processing fails with a withholding tax inconsistency because the supplier master was updated later with a payment withholding tax code.
• To resolve the inconsistency, the scheduled job "Adjustment of Withholding Tax Information to Relevant Type" is executed.
• After the job completes:
  • The withholding tax inconsistency is removed.
  • The uploaded open supplier invoices are updated with the payment withholding tax information, including the withholding tax base amount and withholding tax amount.
  • When the invoices are paid using the Post Outgoing Payment app, withholding tax is deducted again.
• The business expectation is to remove the withholding tax inconsistency without updating the uploaded open items so that no withholding tax is deducted during payment, since TDS had already been deducted in the legacy system before migration.

SAP S/4HANA Cloud Public Edition

1. Update the supplier with a payment-time withholding tax type and code.
2. Upload supplier open invoices (already net of TDS from a legacy context).
3. Post payment for the uploaded open invoices using the Post Outgoing Payment app and observe a withholding tax inconsistency error.
4. Run the scheduled job “Adjustment of Withholding Tax Information to Relevant Types.”
5. Retry the payment and observe that withholding tax is now calculated again at payment time.

• This is the standard system behavior. 
• The scheduled job Adjustment of Withholding Tax Information to Relevant Type synchronizes the withholding tax information of existing open items with the current supplier master data. As a result, the system updates the payment withholding tax type/code, withholding tax base amount, and withholding tax amount on the migrated open items. These values are subsequently considered during payment processing.

• Behavior is standard and cannot be changed through configuration.
• For India withholding tax, the supported business process is:
  • If a supplier advance/down payment is made before the supplier invoice is posted, withholding tax is calculated at the time of payment using the payment withholding tax type and tax code.
  • When the supplier invoice is subsequently posted, withholding tax is calculated again as required by statutory regulations.
  • To avoid double taxation, the supplier down payment should be cleared against the supplier invoice using the Clear Supplier Down Payment (F-54) process. During clearing, the additional withholding tax is reversed according to the standard process.
• If supplier open invoices migrated from a legacy system already represent amounts after TDS deduction, SAP S/4HANA Cloud Public Edition does not support removing the payment withholding tax information from those uploaded documents after the Adjustment of Withholding Tax Information to Relevant Type job has been executed.
• If this situation occurs, the supported approach is to reverse the affected postings (where business permits) and follow the standard India withholding tax process.

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