Supplier tax deduction or withholding tax

Requirement

Self-employed suppliers are responsible for their own income tax payments to the tax authorities. In some industries, the buyer can and does agree to manage this obligation:
  1. The buyer calculates, reports, and pays the tax on the supplier’s behalf.
  2. Calculation can be on the invoiced amount or on the paid amount.
  3. The buyer reports, to the government, all transactions and tax deductions withheld from payments to these suppliers.
  4. The supplier receives a tax certificate as proof of the tax that has been paid over to the authorities on their behalf in this process.

In France, no withheld tax is deducted at supplier payment. But fees paid to service companies must be reported. Fees are reported based on payments, at end of the year.

M3 solution

Four methods are possible for processing and controlling supplier tax deductions, accounting and reporting. The selected method is determined by country-specific rules:

  • The Alt1 method, where supplier payments are reported for tax purposes, but no tax deduction is made
  • The Alt2 method, where tax deductions are made on the supplier payment and then reported to tax authorities
  • The Alt3 method, where supplier tax deductions are recorded on invoice entry, but are accounted for only when the supplier payment is recorded
  • The Alt4 method, where the tax deduction is accounted for at the entry of the supplier invoice

Using the Alt4 method, any tax exemption letter that is received from suppliers can be recorded in the supplier master record.

In France, for fees, an electronic file is created in TXT format, in accordance with the French standard procedure TD-bilatéral honoraires.

For this country version, this message has been adapted, as made available in Infor Localization Services GEMS, ‘Withholding - 100373’: ’FR - Tax Report DAS2’.

Configuration guidelines

Program ID Program name Description or comment
CRS395 Accounting Rule. Set Accounting rules are not used.
APS425 Supplier Tax Report. Display Invoices
APS430 Supplier Tax Report. Create Proposal
APS555 Supplier Tax. Print Details

See the Infor M3 Core Configuration Guide for Infor Localization Services GEMS for the detailed configuration guidelines for the applicable message.