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Withholding tax in SAP

Legal deadlines and reporting obligations make it essential to report all withholding tax matters accurately and on time. In Germany, for example, companies must reliably, transparently and fully comply with the requirements of Section 50a of the Income Tax Act (EStG), the construction withholding tax and the Tax Haven Prevention Act – a key component of tax compliance and audit security.
Internationally, withholding taxes in SAP generally play an even more important role, for example in China, the USA or Mexico.

Automated, period-based reporting is becoming increasingly important and is becoming a decisive quality feature of modern tax processes.

Our withholding tax offering for SAP

We offer implementation for German withholding tax calculation and reporting, including tax returns to the Federal Tax Office and sending certificates to suppliers, as a standardised package directly in your SAP system – modularly adaptable at a fixed price and therefore without the risk of incalculable costs. Solutions for other countries are available on request.

Our scope of services

We differentiate between must-have solutions as a minimum approach and value-add solutions on top for even better data quality. You can choose a modular approach that suits your company and your strategy.

Must Have Compliance - Our basic service:

Automated withholding tax determination

Fixed-price solution: With our fixed-price solution, you will not incur any unexpected costs.

Modular structure: The solution has a modular structure. As a customer, you only select the cases that are relevant to you.

Plug & play — predefined customisation, so it can be implemented quickly

Simplification in withholding tax reporting with SAP DRC

With SAP DRC, we automate your withholding tax reporting. Use cases include:

§ 50a EStG Report DE_WHT_50A as BZST report

Generic withholding tax reports

Supplier/withholding tax certificates

Value Add - extra service:

Next level withholding tax

Your company has a high number of withholding tax cases or a complex process/system landscape and requires solutions that go beyond the WHT and DRC functions of SAP. By using customer-specific SAP solutions, we can improve data quality and governance and automate the WHT process.

FAQs about withholding tax in SAP

Which withholding tax situations can be mapped in SAP?

SAP supports withholding taxes on interest, licences, dividends and services, depending on the respective national law. For Germany, in particular, Section 50a of the Income Tax Act (EStG), the construction withholding tax and Section 10 of the Tax Haven Prevention Act can be mapped.

How is withholding tax calculated in SAP?

Withholding tax is calculated automatically in SAP using extended withholding tax (eWHT). The system uses withholding tax indicator types and codes and allows exemption certificates to be maintained so that the correct withholding tax amount can be determined.

How does SAP DRC support with withholding tax returns and certificates?

SAP Document and Reporting Compliance (DRC) enables the standardised, period-based creation of withholding tax reports, e.g. in accordance with Section 50a of the German Income Tax Act (EStG). It is also possible to generate and automatically send supplier certificates. The solution thus provides a central, audit-proof database and supports the timely, traceable fulfilment of statutory reporting obligations.

The SAP standard requires a high level of manual processing. How can I increase the automation rate?

In addition to our standardised solution for withholding tax determination and reporting, we also offer customised enhancements as required. These serve in particular to increase data quality, automate special circumstances and map individual business processes within the SAP standard.

Your expert on withholding tax in SAP

Mischa Brehm - Director Digital

Mischa Brehm is your expert for tax-related SAP projects with experience in international S/4HANA rollouts – both in the DAX40 environment and in medium-sized businesses.

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