Setting up withholding tax and social contributions

To set up withholding tax and social contributions:

1. Set up the parameters

   In the Implementierte Software-Komponenten (tccom0100s000) session, select the Einkommensteuer und Sozialabgaben einbehalten check box.

2. Define the tax categories

   If you must distinguish various types of withholding tax and social contributions on your reports, define the tax categories required for your country in the Steuerkategorien (tctax0115m000) session.

3. Define tax base value formulas

   For tax categories for which the tax amounts are not based on the net goods value amounts, you can define the algorithm used to determine the tax base value. For details, refer to Specifying tax base value formulas.

4. Define the tax codes

   In the Steuercodes nach Gruppensteuercode (tctax0139m000) session, click New to add the tax codes that you defined in Step 3 to the group tax code.

   Define the tax codes, the tax rates, and the tax posting data as described in Setting up tax registration. These details are especially important:

   • Steuerart

     Define separate tax codes, as required, for:

     • Umsatzsteuer
     • Einbehaltene Einkommensteuer
     • Einbehaltene Sozialabgaben
     • Sozialabgaben (Unternehmeranteil)
     • Nicht einbehalten

     For details, refer to Kinds of tax.

   • Tax rates

     If the tax consists of a single rate, define a singular tax code. If the tax consists of different rates on separate parts of the amount, define a multiple tax code. For example, you must define a multiple tax code for social contributions to which one or more threshold amounts apply.

   • Formel für Bemessungsgrundlage

     For the tax codes for which you defined a tax base value formula as described in Step 3, in the Steuercode nach Land (tcmcs0136s000) session, select the tax base formula in the Formel für Bemessungsgrundlage field. In one country, tax codes of the same tax category must have the same tax base value formula.

   • Payable periodically or at invoice payment

     In the Steuer bezahlen field of the Steuercode nach Land (tcmcs0136s000) session, select the time at which you must pay the withholding tax and social contributions to the tax authorities. If the tax is payable at invoice payment, you must enter the collection office to which you pay the withholding tax and social contributions and the tax settlement tax code.

     LN does not include tax codes for which you select Bei Rechnungszahlung in a tax declaration. If you pay a purchase invoice for which the withholding tax is payable at invoice payment, LN automatically generates a standing order to pay the tax to the collection office.

5. Approve the tax codes

   Before you can link the tax codes to a group tax code, in the Steuercode nach Land (tcmcs0136s000) session, you must select the Genehmigt check box for each tax code.

6. Define a group tax code

   In the Steuercode nach Land (tcmcs0136s000) session, define a tax code and select the Gruppensteuer check box to indicate that the tax code is a group tax code. For a group tax code, you cannot enter other tax details.

7. Add the tax codes to the group tax code

   In the Steuercodes nach Land (tcmcs0536m000) session, from the appropriate menu, select Steuercd nach Grp.. The Steuercodes nach Gruppensteuercode (tctax0139m000) session starts.

   You must link one tax code of the VAT kind. The tax codes must have the Genehmigt status. If you click the browse arrow of the Steuercode field, LN only lists tax codes that you can add to the group tax code.

8. Approve the group tax code

   Before you can link the tax codes to a group tax code, in the Steuercode nach Land (tcmcs0136s000) session, you must select the Genehmigt check box for the group tax code.

9. Set up default group tax codes for your business partners

   Link the group tax code to the tax classification in one of these sessions:

   • Steuerausnahmen nach Land (tctax1100m000)
   • Steuerausnahmen nach Ländersatz (tctax1101m000)

   You can only select a group tax code if you enter these details:

   • The Auftragsherkunft must be Einkauf or Eingangsrechnung.
   • The Steuerklassen field must be filled.

   If you save the data, LN verifies that the group tax code contains tax codes of the kinds of tax that correspond with the selected tax classification.

   In the Steuerparameter (tctax0100m000) session, select Ausnahmen nach Land or Ausnahmen nach Ländersatz, as applicable, in the Suchfolge 1 field.

10. Set up the business partners for withholding tax and social contributions

    Set up the details for your business partners as described in Setting up business partners for withholding tax and social contributions.