Extended Withholding Tax Settings

Following is the step-by-step configuration for setting up Extended Withholding Tax

Step – 1
Check withholding Tax Countries

Path

SPRO – FA – Global Settings – Withholding Tax – Extended Withholding Tax – Basic

Settings - Check withholding Tax Countries
Step – 2

Define Official Withholding Tax Codes

Path

SPRO – FA – Global Settings – Withholding Tax – Extended Withholding Tax – Basic

Settings - Define Official Withholding Tax Codes

Define TDS Section

applicable in the Country
Step – 3

Define Reasons for Exemption

Path

SPRO – FA – Global Settings – Withholding Tax – Extended Withholding Tax – Basic

Settings - Define Reasons for Exemption

Here exemption reason can be

defined which has to be entered into
vendor masters
Step – 4

Define Withholding Tax Type for Invoice Postings

Path

SPRO – FA – Global Settings – Withholding Tax – Extended Withholding Tax –

Calculation – Define Withholding Tax Type for Invoice Postings

Part 1

Define the withholding Tax Types for

various types of taxes where tax is to be
calculated on the basis of invoice
postings
Part – 2

System generates
a serial no. for W.
Tax Types

Define the base amount

on which W. Tax will be
calculated
Step – 5

Define Withholding Tax Type for Payment Postings

Path

SPRO – FA – Global Settings – Withholding Tax – Extended Withholding Tax –

Calculation – Define Withholding Tax Type for Payment Postings

Part 1

As we defined withholding Tax

Types for invoice posting, same
way define W. Tax type for
payment postings
Part - 2
Step – 6

Check Recipient Types for Withholding Tax

Path

SPRO – FA – Global Settings – Withholding Tax – Extended Withholding Tax – Basic

Settings – Check Recipient Types

Here you define Recipient Types for

W. Tax Types defined in steps 4 & 5.
Recipient Types are normally of 2
categories in India – Corporate and
other tan corporate
Step – 7

Define Withholding Tax Codes

Path

SPRO – FA – Global Settings – Withholding Tax – Extended Withholding Tax –

Calculation –Withholding Tax Codes - Define Withholding Tax Codes

Part - 1

In this step you define

Withholding Tax Code. This
code consists of W. Tax rates
and is assigned to vendor’s
master
Part - 2

Assign the Official

Withholding Tax Code
defined in step 2

Define the
applicable
rate here
Step – 8

Define Withholding Tax Codes

Path

SPRO – FA – Global Settings – Withholding Tax – Extended Withholding Tax –

Calculation –Withholding Tax Base Amount – Portray Dependencies between
Withholding Tax Types

In some countries W.
Tax Type is dependent
upon some other W. Tax
Type. Settings for such
dependency is to be
done here. W. Tax Type
no is to be entered as
dependent
Step – 9

Define Min / Maximum Amounts

Path

SPRO – FA – Global Settings – Withholding Tax – Extended Withholding Tax –

Calculation – Minimum and Maximum Amount – Define Min/Max Amounts for
Withholding Tax Types

Here you can define

Min/Max Amount for each
withholding Tax Type
Step – 9

Define Min / Maximum Amounts

Path

SPRO – FA – Global Settings – Withholding Tax – Extended Withholding Tax –

Calculation – Minimum and Maximum Amount – Define Min/Max Amounts for
Withholding Tax Codes
Step – 10

Assign Withholding Tax Types to Company Codes

Path

SPRO – FA – Global Settings – Withholding Tax – Extended Withholding Tax –

Company Code – Assign Withholding Tax Types to Company Codes

Part – 1
Part – 2

Tick this field. The system

allows the company code to
hold tax on behalf of a
vendor

Step – 11

Activate Extended Withholding Tax

Path

SPRO – FA – Global Settings – Withholding Tax – Extended Withholding Tax –

Company Code – Activate Extended Withholding Tax
 Once all the above settings are done.
You have to activate the EWT by
ticking in this field

Step – 11

Define Accounts for Self Withholding Tax

Path

SPRO – FA – Global Settings – Withholding Tax – Extended Withholding Tax –Postings

– Accounts for Withholding Tax – Define Accounts for Self Withholding Tax
Step – 12

Define Accounts for Withholding Tax Offsetting Entry

Path

SPRO – FA – Global Settings – Withholding Tax – Extended Withholding Tax –Postings

– Accounts for Withholding Tax – Define Accounts for Withholding Tax Offsetting Entry