Withholding tax processing

Withholding tax is typically a government requirement. The payer of income withholds or deducts direct tax from the payment and pays the tax to the government. Accounts payable withholding tax is used in situations where amounts are held from payments to the vendor and the payments are reported to the government.

Australia specifics

Vendors must provide their Australian Business Number (ABN). or the vendor must complete a Statement by Supplier (SAS) form. The SAS is available from the Australian Tax Office (ATO).

If the SAS form is not provided, then withholding tax of 47% is deducted from payments and paid to the ATO. The vendor and ATO receive a payment summary.

Payers must withhold 47% from the total payment for a supply unless one of these conditions apply:

  • Payers have an invoice or some other document for the supply on which the vendor's ABN is quoted
  • The ABN of the vendor's agent is quoted, if the supply is made through the agent
  • One of the exceptions to withholding applies, or the vendor is not entitled to an ABN.

Payers may be required to withhold 47% from the payment. They must have reasonable grounds to believe that the ABN quoted is invalid, for example, it belongs to another entity.

How Infor meets this requirement

See Payables setup in the Financials Setup and Administration Guide.

See the Payables User Guide.