Authorizations & Roles

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Table of contents
1 Objective and Scope
1.1 Objective of this Procedure
1.2 Scope
2 Reference Documents
3 Definitions
4 MAIN PART
4.1 Periodicity
4.2 Responsibility (who does what)
4.3 Procedure
4.3.1 What's Withholding Tax?
4.3.2 Accounting view
4.3.3 Steps of the process with all action owners
4.3.4 Reconciliation of accounts 2415000000 (PF1)/44700700 (RCS)
5 Appendix

Objective and Scope

Objective of this Procedure

The purpose of this document is to explain the process of Withholding Tax.

Scope

This operating procedure (OP) applies to all Solvay companies (PF1 and WP1 systems).

Reference Documents

(…).

Definitions

SBS-RtR-BO - Solvay Business Services - Record to Report - Back Office

MAIN PART

Periodicity

This procedure should be executed on a weekly basis

Responsibility (who does what)

RtR FtO is in charge to provide the information to RtR BO to clear in the affiliate the Account for WT in BS with the P&L Account as follow:

RtR BO is in charge of clearing the BS Account in Affiliate (RCS: 44700700 / PF1: 2415000000)

Procedure

What's Withholding Tax?

In some countries, payment of services invoices are subject to deduction of local taxes, this is called Withholding Tax or "withholding". The amount of tax is deducted by the payer of the amount due to the partner providing the service, the payer pays the tax directly to the government.

Accounting view

Steps of the process with all action owners

1. When invoice is assigned to WARP:

Assignment of invoice with full amount (no deduction of WH tax, no info in factoring contract)
Action owner: automatic

1. When payment is received:

Clear manually invoice with payment and create a residual item on account (reason code AR) + create manually a dispute with reason code C007 (Tax issue)
Action owner: OtC

1. Request evidence from customer (= obtain the proof of WT)

Action owner : OtC - AR or Collections depending on type of customer

1. Received evidence from customer and only clear after manually customer residual item on GL account using reason code WT - auto replication in ERP (WP1: 44700700 / PF1: 2415000000)

Action owner: OtC

1. AR to transfer case with evidence to RtR (BO) after clearing in WARP 

Attach manually evidence in ERP manually (maybe improvements later)
Action owner : OtC

1. ACP is in charge to clear the BS account impacted by the point 4, see action described below on point 4.3.4

1. CAM is in charge to provide the information to ACP to clear in the affiliate the Account for WT in BS with the P&L Account as follow:

How to define the process to use during the year for WHT clearing

Every year in February RtR Bo will list the amount posted on BS account by company and will request to the corresponding CAM the validation to take in P&L on a weekly basis the WHT amount.
There are two possible cases:

1. Agreement for P&L impact:

Application of the procedure descript below with impact in P&L

1. No impact in P&L:

On a weekly basis SC will check if the proof of payment is in attachment of the postings. If we have no attachment we should request these to OtC. 
The amount will remain open in BS.
On a monthly basis SC will provide to the CAM the extraction of the line items of the account. 

Reconciliation of accounts 2415000000 (PF1)/44700700 (RCS)

How to retrieve the information

The process to retrieve the information is the same for both systems:
For PF1/WP1 Go to FBL3N
Select variant SBS BO WHT (PF1) / (WP1)


Example of PF1:

Layout /SBS BO WHT

For PF1 case:
Transfer the amount line by line to P&L account with a final reporting division CC linked to the div that appear in the posting on the account 241500000 ex:
Use of the account 6720003209 + CC462 (e.i. : SM46200000)
Mention obligatory in the posting on the account 6720003209:
in text : WITHOLDING TAX ON INVOICES [0001]1000064656
in trading partner : Trading partner of the companies invoiced
Posting must be done line by line, and clearing of the BS 2415000000 must be done also amount by amount to be able to track directly the original posting on the 2415000000 as the proof of payment will be attached to the 2415000000
For WP1 case:
Transfer the amount line by line to P&L account
The input on the Profit Center market will be provided by the CAM of the companies
P&L accounts:

• 98325190 if related to CBS Costs
• 98731000 if related to R&D

Mention obligatory in the posting on the account 98*
in text : WITHOLDING TAX ON INVOICES [0001]1000064656
in trading partner : Trading partner of the companies invoiced
Posting must be done line by line, and clearing of the BS 44700700 must be done also amount by amount to be able to track directly the original posting on the 44700700 as the proof of payment will be attached to the 44700700

Example for PF1:

How to make the posting in both systems

1^st – Select the posting you want to reclassify

2^nd – check if the posting has the proof of payment in attachment

Note: If no proof of payment in attach, please contact OtC by sales force case.

3^rd – Go to FB05 and perform a "transfer posting with clearing"

Debit the account 6720003209 for PF1 (to allocate the amount directly to P&L) and use the correct reporting cost center (attention with the business area. In this example is 8950).

 

In the text mention to the invoice related (in this case 10000062853).
To reach the invoice please check the instructions more forward.

Then select

• • Edit
  • Choose Open items

• • Flag the options below:

• • Select the document you are reclassifying

You will find the amount to balance your posting:

• • Simulate the posting

Check if everything is inline and perform the posting.


To reach the original invoice follow the steps below:
Open the document and select the line of the customer

Click in the document linked to the clearing and select the payment usage:

You will reach the document for the underpayment.
Select the document and

Click in the document linked to the clearing and select the payment usage:

And you will find the C0 related to this operation:

Now you can update the text of the posting with the invoice related.

Appendix

N/A