Setting up business partners for withholding tax and social contributions

The process to set up the details for business partners of which the invoices are subject to withholding tax and social contributions consists of the following steps:

1. Specify tax classifications, and link the tax classifications to the business partners.
2. Link the group tax codes to the tax classifications.
3. Specify the business partner's withholding tax details.
4. In some countries, the tax collector's office publishes maximum amounts for each supplier over which you must withhold income tax and/or social contributions. If tax base amount limits apply, specify the tax base amount limits.

Specify tax classifications to specify tax classifications and link the tax classifications to the business partners:

1. In the Steuerklassen (tctax0116m000) session, define the tax classifications. For each classification, you can indicate whether withholding tax and/or social contribution applies to purchase invoices for business partners with the classification.
2. In the Rechnungssteller (tccom4122s000) session, you can select your suppliers' tax classification.

Link group tax codes to tax classifications to link the group tax codes to the tax classifications, you must define tax code exceptions as described in Defining tax exceptions.

1. In the Steuerausnahmen nach Land (tctax1100m000) or the Steuerausnahmen nach Ländersatz (tctax1101m000) session, specify the following data:

   • Auftragsherkunft

     Select Einkauf for purchase orders, or select Eingangsrechnung.

   • Steuerklassen

     The tax classification.

   • Steuercode

     The group tax code for the tax classification.

     Ensure that the group tax code contains tax codes of the kinds of tax that correspond with the kinds of tax set up for the tax classification. You can only select group tax codes that you approved.

Specify the business partner's withholding tax details. The withholding tax reports, declarations, and payments must contain specific business partner details such as the business partner's fiscal number. To specify the business partner's withholding tax details, take the following steps:

1. In the Handelspartner (tccom4500m000) session, double-click the business partner to start the details session.
2. Click Rechnungssteller to start the Rechnungssteller (tccom4122s000) session, and on the appropriate menu, click Daten einbehaltene Steuer. The Daten über vom Handelspartner einbehaltene Steuer (tccom4127s000) session starts.
3. Specify the various details. You must specify the business partner's fiscal number.

Specify the tax base amount limits you can specify the maximum tax base amount in two ways:

1. For a range of invoice-from business partners

   1. In the Grenzbeträge Einkommensteuer & Sozialversicherungsbeiträge (tctax0117m000) session, on the appropriate menu, click Grenzbeträge für Einkommensteuer & Sozialabgaben generieren. The Grenzbeträge für Einkommensteuer & Sozialabgaben generieren (tctax0217m000) session starts.
   2. In the Grenzbeträge für Einkommensteuer & Sozialabgaben generieren (tctax0217m000) session, specify the tax base amount limit for a range of invoice-from business partners and one type of tax (income tax or social contribution), tax category, and tax year.

2. For individual business partners

   In the Grenzbeträge Einkommensteuer & Sozialversicherungsbeiträge (tctax0117m000) session, specify the tax base amount limit for each combination of:

   • Invoice-from business partner
   • Type of tax, which can be income tax or social contribution
   • Tax category
   • Tax year