Description
According to the Thai law withholding tax should be calculated from base amount after the deduction of VAT and trader discount. In case of the partial payment with “DISCOUNT”, the withholding tax must be proportional deducted for discount before calculating for the withholding tax.
With the standard outgoing payment function, the system does not recognize the partial discount from the partial payment. Therefore in the Country Version Thailand, you need to use the function of Payment request (transaction: F-59) to have a partial discount calculated and posted by the system. Then you can make a normal payment for that payment request.
Note
The standard payment program generates a discount items only at the clearing procedure. Transaction Entry
1. Create Payment request (F-59) for each partial payment. 2. Make a payment (outgoing/automatic) for the payment request. Menu Path
From the Easy Access Screen Choose: Accounting→Financial Accounting→Accounts Payable→Document Entry→Payment Request
Customizing Tables
• Define Alternative Reconciliation Account for Vendors
Standard R/3 provides special G/L indicator “P” for payment request Menu Path
IMG→Financial Accounting→Accounts Receivable and Accounts Payable→Business
Transactions→Postings with Alternative Reconciliation Account→ Define Alternative Reconciliation Account for Vendors
Transaction: OBXT Note
The payment request is only used when there is a cash discount for the partial payment
3.3.3.2 Post Withholding Tax Amount with Exchange Rate of Bank of Thailand Description
According to the Departmental Instruction no. 71/254 that prescribed about exchange rate for business must use the rate of previous day that prescribe by Bank of Thailand for withholding tax.
Example: Bank and Withholding Tax Accounts
For the payment transactions, the system recognizes 2 exchange rates: one rate for bank accounts and the other rate for withholding tax account
For example:
Vendor-A 1,000 USD, exchange rate = 30 Pay at fixed rate 35.00/usd withholding tax 10% Vendor-B 2,000 USD, exchange rate = 30 Pay at fixed rate 38.00/usd withholding tax 10% At payment exchange rate at previous day = 40.00/usd
Foreign Curr. Local Curr.
Debit Accounts Payable-A 1,000.00$usd 30,000.00 Baht (1,000 x 30.00) Debit Gain/Loss on Exchange rate 5,500.00 Baht
Credit Bank Account 900.00$usd 31,500.00 Baht (1,000 – (1,000x10%)) x 35 Credit Withholding Tax 100.00$usd 4,000.00 Baht (1,000 x 40 x10%)
Foreign Curr. Local Curr.
Debit Accounts Payable-B 2,000.00$usd 60,000.00 Baht (2,000 x 30) Debit Gain/Loss on Exchange rate 16,400.00 Baht
Credit Bank Account 1,800.00$usd 68,400.00 Baht (2,000 – (2,000 x 10%)) x 38 Credit Withholding Tax 200.00$usd 8,000.00 Baht (2,000 x 40 x 10%)
This release 4.6C the system allows you to define a new exchange rate type for each withholding tax type. You should maintain the rates of this exchange rate type everyday. If you do not define a new exchange rate type, the system will automatically picks up the rate from the standard exchange rate. Customizing Tables
• Check exchange rate types
To create a new exchange rate type for withholding tax calculation.
ExRt Usage Ref.crcy Buy.rt.at Sell.rt.at Inv EMU Fixed
xxxx Bank of Thailand Rate
Menu Path
IMG →General Settings →Currencies →Check exchange rate types
• Define translation ratios for currency translation
To maintain ratio in each currency of new exchange rate type that you created. ExRt From To Valid From Ratio (from) Ratio (to) Alt.ERT xxxx USD THB 01.01.2000 1 1
Menu Path
IMG →General Settings →Currencies →Define translation ratios for currency translation
• Enter exchange rates (OB08)
To maintain the exchange rate of new exchange rate type that you created in each day. ExRt Valid From Indir.Quot Ratio(from) From Dir. Quot. Ration (to) To
Xxxx 04.01.2000 X 1 USD = 46.55559 X 1 THB
Xxxx 03.01.2000 X 1 USD = 46.89999 X 1 THB
Xxxx 01.01.2000 X 1 USD = 47.56789 X 1 THB Menu Path
IMG General Settings Currencies Enter exchange rates NOTE:
Please maintain the date of the exchange rate by using the Announcement Date of the Bank of Thailand. Do not use the date of the Reference Exchange Rate.
For example, if you want to post the transaction on January 15, 2000, you should enter the exchange rate date with ‘January 15, 2000’ and the rate that the Bank of Thailand announces on January 15, 2000, even though this rate is the average rate from January 14, 2000.
• Assign withhold tax exchange rate for each withholding tax type
This step defines exchange rate type for withholding tax type. To use in withholding tax calculation.
Alternative Exch. Rate Type for Withholding Tax Calculation
Wth.Tax Type Name Exc. Rate
01 Invoice Posting Xxxx
02 Invoice Posting (one cycle grossing up) Xxxx
11 Payment Posting Xxxx
12 Payment Posting (one cycle grossing up) Xxxx R1 A/R-No centr.inv.& Chck min.base amt
Menu Path
IMG Financial Accounting Financial Accounting Global Settings Withholding Tax Extended Withholding Tax Calculation Withholding Tax Type Define Exchange rate type for Withholding Tax Type
• The following information should be maintained in the vendor master:
• Assign one or more withholding tax type
• Assign form number (i.e. 2, 3, 53 or 54) into the recipient type. The recipient type represents the tax form (Phaw. Ngaw. Daw. Form).
• The ‘Liable’ flag should be marked. Vendor xxxxxx
Withholding Tax Information Withholding Tax Information
W/tx Type W/tx code Liable Recipient Type
01 54
02 54
Limitation: Each vendor code should have only one recipient type. There is not validation check provided by the system.
Menu Path
From Easy Access Screen choose: Accounting Financial Accounting Accounts Payable Master Records
3.3.3.3 Check Minimum of Withholding Tax Amount in Posting Description
In Thailand, if the assessable income in one contract is less than 500 Baht, the deduction of the withholding tax is not required. The minimum check can be performed at both invoice and payment posting depending on where the withholding tax is posted.
Case I. Checking minimum of withholding tax amount for invoice posting
• If you set the minimum amount check at the invoice posting, the system will check the amount of each invoice amount whether the amount is over and equal 500 Baht.
Case II. Checking minimum of withholding tax amount for payment posting
• If you set the minimum amount check at the payment posting, the system will check the total amount of selected invoices to be paid. If the total invoice amount is equal or more than 500 Baht, even though the total paid amount is not more than 500 Baht, the system will calculate/post the withholding tax from the paid amount of each invoice.
Example 1:Total invoice amount is more than 500 Baht, but the total paid amount is less than 500 Baht
Invoice Invoice amount Paid amount Withholding Tax 10%
No. 0001 100.00 100.00 10.00
No. 0002 100.00 100.00 10.00
No. 0003 600.00 200.00 20.00 (10% of 200)
Example 2: Total invoice amount is 500 Baht and the total paid amount is 500 Baht Invoice Invoice amount Paid amount Withholding Tax 10%
No. 0001 100.00 100.00 10.00
No. 0002 100.00 100.00 10.00
No. 0003 200.00 200.00 20.00
No. 0004 100.00 100.00 10.00
In case of the foreign currency transaction, the system calculates the withholding tax from the translated base amount translated in the local currency, not directly from the foreign currency amount.
Customizing Tables
• Define Withholding Tax Type for Payment Posting
To define minimum/maximum amounts in each withholding tax type by selecting “Min.base amt check at doc.invoice level”
Menu Path
Financial Accounting Global Settings Withholding Tax Extended withholding Tax Calculation Withholding tax type Define withholding tax type for payment posting See maintain withholding tax type for payment posting in the Customizing withholding tax
• To define minimum base amount per withholding tax code. Menu Path
IMGFinancial Accounting Financial Accounting Global Settings Withholding
TaxExtended Withholding TaxCalculation Minimum and Maximum Amounts Define Min/Max Amounts for Withholding Tax Codes
Note:Do not define minimum base amount for withholding tax code of one cycle gross up.
3.3.3.4 Use Paid Condition in Withholding Tax Posting