Re: [ubl-psc] [Invoice][WithholdingTax] Issue revival

["Roberto Cisternino" <roberto@javest.com>]

This kind of tax is in connection with micro businesses
(soleproprietorship) that may have *special* tax regimes, and the
"Withholding tax" is applied to the proprietorship personal income.

For such kind of micro businesses the tax authority is applying similar
rules that are applied to employees where the employer takes from their
salaries a percentage in advance for personal income taxation.

The invoice payable amount is still the amount to be paid by the customer
to the supplier.

The withholding tax amount is to be paid by the customer to the tax
authority on behalf of the supplier.

So in simple words, the supplier proprietorship is pre-taxed (in Italy is
20%) on each invoice issued.
At the end of the year the proprietorship will have to present a tax
return to the authority to pay the remaining taxes.

Usually micro businesses subject to Withholding tax are not allowed to
apply VAT on their invoices, but they are subject to VAT however (on
invoice receival)

This is a separate thing that cannot be mixed with other taxes.

Hope this clarify the issue

Cheers,

Roberto

> Hi Tim
>
> Withholding tax is not a tax in the sense we have all the other taxes in
> an invoice. It is something like a payment means. You are giving
> instructions to the receiver of the invoice: Pay this taxes for me to the
> Tax Authority,
>
> I do not know whether this must be a tax total or another structure more
> close to Allowance and charges but we need it separate as the business
> rules governing it are quite different from the ones governing other types
> of taxes.
>
> regards
> Oriol
>
> El 05/03/2011, a las 02:23, Tim McGrath escribió:
>
>> on first impression I think this is not the way to go.  the principle of
>> UBL tax structures is that they are not based on specific types of
>> taxes.
>>
>> we recognize consumption taxes (such as VAT) and sales taxes (used in
>> US, etc.) but  need to keep the models  independent.
>>
>> So is it that we need to specify a payable total that does not include
>> certain taxes?
>>
>>
>>
>> On 4/03/2011 10:37 PM, Roberto Cisternino wrote:
>>>
>>> Hello PSC,
>>> I recently discussed with Oriol Bausą the need to revive an old issue
>>> about the "Withholding Tax" because we found this use case is not well
>>> supported by UBL 2.1 as we initially believed.
>>>
>>> The "Withholding Tax" information has a different behaviour and meaning
>>> from goods/service and VAT taxes.
>>> It is a tax related to the personal income of the invoicer (usually a
>>> soleproprietorship or freelance) that is calculated in percentage on
>>> the
>>> taxable amounts (for such kind of tax), but is paid to the Government
>>> by
>>> the Invoicee (Customer).
>>>
>>> The Withholding Tax is applied just to certain line items (usually
>>> expenses like transport, hotel are excluded)
>>>
>>> As the Withholding Tax is not always applicable to the whole Invoice
>>> taxable amounts, it "could" be useful to present a separated taxable
>>> amount for it, but this information can be calculated.
>>>
>>> >From the VAT point of view (the main Invoice purpose) the "Total Due
>>> Amount" of an invoice (aka. Payable Amount) is NOT including any
>>> "Withholding Tax".
>>>
>>> The "Withholding Tax" is however a component of the Invoice Total just
>>> like "Prepaid Amount", but is not payable to the Invoicer/Supplier (as
>>> explained before).
>>>
>>> On paper invoices the "Withholding Tax" total is also provided
>>> separately
>>> from other totals, as this amount is important to be presented to the
>>> Invoicee (Customer) who is requested by the Government to pay on behalf
>>> of
>>> the Invoicer.
>>>
>>> The full Withholding Tax concept is available here:
>>> http://en.wikipedia.org/wiki/Withholding_tax
>>>
>>> Finally I provide a set of improvements required to support this case:
>>>
>>> 1) Add a new ABIE named "WithholdingTaxTotal" after the "TaxTotal"
>>>
>>> 2) Add the new "WithholdingTaxTotal" ABIE under the cac:InvoiceLine
>>> after
>>> the "TaxTotal" (this will be used to identify those line items subject
>>> to
>>> withholding tax)
>>>
>>> The proposed definition for WithholdingTaxTotal is:
>>>
>>> "An association to Withholding Tax Total."
>>>
>>>
>>> For the purpose of evaluating and understanding this important
>>> requirement
>>> I attach a real invoice where the withholding tax is applied, but not
>>> VAT.
>>> The sample is also useful to see how the withholding tax data is
>>> presented
>>> separately from VAT amounts.
>>> The invoice is provided either in English and italian.
>>>
>>>
>>> Best regards
>>>
>>> Roberto
>>>
>>>
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>


-- 
* JAVEST by Roberto Cisternino
*
* Document Engineering Services Ltd. - Alliance Member
* UBL Italian Localization SubCommittee (ITLSC), co-Chair
* UBL Online Community editorial board member (ubl.xml.org)
* Italian UBL Advisor

  Roberto Cisternino

  mobile: +39 328 2148123
  skype:  roberto.cisternino.ubl-itlsc

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