R12.1:JL:AP: ER 26086830 Withholding Tax For Amount Ranges Not Applied Correctly for El Salvador (Doc ID 2269184.1)

Last updated on MAY 23, 2017

Applies to:

Oracle Financials for the Americas - Version 12.1 and later
Information in this document applies to any platform.

Symptoms

On : 12.1.3 version, Invoices TAX and WITHHOLDING

Withholding Tax for amount ranges is not applied correctly.

a) For any invoice amount <=1,000.00 the withholding tax rate should be 0%
b) For any invoice amount >=1,000.00 the withholding tax rate should be 1%


The issue can be reproduced at will with the following steps:

1. Responsibility: Oracle Payables - 12.1.3
The withholding tax has been setup with the 'Rate Structure' as 'Amount Ranges'.

2. Path: Invoices -> Entry -> Invoices
3. Create an invoice and save.
4. Validate the invoice
For any invoice amount <=1,000.00 the withholding tax rate should be 0%
For any invoice amount >=1,000.00 the withholding tax rate should be 1%

However, a withholding tax invoice is created correctly for supplier invoice amounts <=1,000.00 but not for invoice amounts > 1,000.00


The issue has the following business impact:
Due to this issue, withholding tax is not correctly applied.

Customer in the middle of a global implementation.
There is a legal taxation requirement which implies to calculate the withholding tax only if the withholding base amount exceeds the minimum base amount.

The minimum base amount has to be defined as a parameter.

Countries such as Argentina and Colombia already have this setup as part of localization.

Country El Salvador also requires this setup.

Cause

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