As businesses expand globally, they face a complex web of regulatory compliance requirements. One of the most important obligations for enterprises is to meet their statutory reporting requirements accurately and on time. To help organizations with this challenge, SAP Document and Reporting Compliance provides a range of features and functionalities that enable customers to generate accurate and compliant statutory reports. Recently, SAP has introduced two new reporting activities for the Withholding Tax statutory reports, namely "Review Withholding Tax Items" and "Clear Withholding Tax Items" in the Run Statutory Reports app. In this blog, we will take a closer look at the withholding tax procedure and how SAP's solution simplifies this process for businesses.
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Withholding Tax procedure
Withholding Tax procedureNavigating tax regulations can be daunting. The SAP Document and Reporting Compliance and Run Statutory Reports app simplify compliance with withholding tax declaration mandates. It provides a range of reporting functions for precise and streamlined withholding tax declarations, including the generation of tax certificates, the creation of tax reports, and the submission of tax declarations. Utilizing this app helps businesses remain up-to-date with tax laws and circumvent possible fines or penalties.
How do withholding reporting activities work?
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SAP Document and Reporting Compliance, Withholding Statutory Report activities
SAP Document and Reporting Compliance, Withholding Statutory Report activitiesManage Withholding Tax Items "MWTI"
The MWTI activity allows business users to exclude one or more tax items from reporting periods by changing the tax reporting date. The app retrieves documents based on parameters from the statutory reporting task or the filter values provided in the MWTI activity screen, depending on the Withholding Tax Reporting Date field.
As a business configuration expert user you should ensure you completed the Setting Up the Withholding Tax Legal Form Report.
If the withholding tax reporting date is unavailable, you can run the Migration Report for Withholding Tax Reporting Date app to update the source documents.
To correct tax reporting errors, you can exclude documents, post Credit Memos/Delta postings, report documents later, change the withholding tax reporting date, or run a correction for statutory reports.
Once all the withholding tax items have been included or excluded as required, mark the activity status as COMPLETED.
Updatable documents cannot be revised after the reporting period has been closed. However, you can submit the correct documents by reversing the reporting period, posting a credit memo, or generating the withholding tax advanced compliance report in a correction run.Reviewing Withholding Tax Items.
After completing the activity, you can perform new reporting activities to review the withholding tax items available in the period and clear them for preparing the Withholding Tax Report.
The primary objective of the two newly introduced activities is to streamline the procedure of submitting legal forms for withholding tax items in order to guarantee adherence to the local tax laws and regulations. The accompanying flowchart for scrutinizing and authorizing the withholding tax is presented beneath, which takes you through every step and shows in reverse case if needed.
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Review and Clear Withholding Tax flowchart
Review and Clear Withholding Tax flowchartReview Withholding Tax Items "RWTI"
The RWTI reporting activity enables business users to review and finalize the list of withholding tax items for the reporting period.
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Review Withholding Tax Items "RWTI"
Review Withholding Tax Items "RWTI"As a business user, you can select the Run ID for a single company code and reporting dates and review the withholding tax items to ensure that the correct documents have been included in the reporting period.
If the withholding tax items for that Run ID are accurate, you can set it to "READY FOR CLEARING" status.
As a business configuration expert user, you should ensure the activation of the new reporting activity RWTI.
These withholding tax items will be the source the Clear Withholding Tax Items activity to create a clearing document, and the source for the Prepare Withholding Tax Report activity to generate the legal form
Clear Withholding Tax Items "CWTI"
The CWTI reporting activity allows business users to generate a clearing document for the withholding tax items before reporting the legal form
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Clear Withholding Tax Items "CWTI"
Clear Withholding Tax Items "CWTI"As a business user, you can process the clearing and the payment of withholding tax to the tax authority for the Run ID that was updated as " READY FOR CLEARING" in the RWTI activity.
As a business configuration expert user you should ensure the activation of the new reporting activity CWTI, and you created a supplier corresponding to your tax authority in the business partner master data and Assigned Tax Authority and Accounting Document described in Making Additional Settings for Withholding Tax Legal Form.
As abusiness user, the new activity supports clearing only for the reporting entity's leading company code.
You should not post documents with varying recipient types at the line level. If a document contains line items with different recipient types, then the CWTI activity clears the entire document amount. This might lead to an inconsistency between the amount cleared and the amount reported in the legal form. The legal form only includes line items with the recipient type for the legal form.
Once the clearing document has been successfully generated, the report Run ID should be updated to " CLEARED " status in the RWTI activity.
Generate Withholding Tax Legal Form
Following the previously completed activities, and using the Run Statutory Reports app, you can generate the legal Withholding Tax report and perform further actions, such as view, analyze, and download the report output.
When the RWTI activity is active, the legal form is produced based on the withholding tax items generated in a report with a Run ID that has a " READY FOR CLEARING" or "CLEARED" status.
If the CWTI activity is active, it is essential to ensure that the withholding tax has been paid to the tax authority in compliance with local regulations.
Conclusion,
To ensure compliance when submitting the Withholding Tax legal form in Egypt, it is crucial to complete all necessary settings and include the appropriate documents within the reporting period. The Run Statutory Reports app offers reporting activities such as Manage, Review, and Clear Withholding Tax Items, which aid customers in fulfilling the withholding tax declaration requirements. These activities enable business professionals like GL Accountants, Tax Consultants, or AP Managers to manage withholding tax items effectively, ensuring they can include or exclude items, review and finalize the list, and clear the items for the remittance document submitted to the tax authority.
Taxpayers must comply with the tax authority's regulations by providing details of the remittance document, serving as evidence of tax payment within the reporting period, when filing the Withholding Tax legal form. Essentially, companies are required to declare and remit the withholding tax prior to submitting the legal form. For an in-depth guide on this procedure, the SAP Help Portal serves as a valuable resource.
Releases
The two new activities have been enabled in Egypt's local version of SAP Document and Reporting Compliance in the following release that support SAP Customers and Businesses operating in Egypt who are required to file the Withholding Tax Form 11 and Form 41.
The upcoming release is for the Oman local version in SAP S/4HANA Cloud Public Edition 2408.
Quick Demo
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