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R12.2:AP: Payables With Argentinean Localization. Withholding Amount Is Incorrect Generated On SLA (Doc ID 2642211.1)

Last updated on MARCH 30, 2020

Applies to:

Oracle Financials for the Americas - Version 12.1.1 and later
Information in this document applies to any platform.

Symptoms

On : 12.2.4 version, Americas Globalization Payables

ACTUAL BEHAVIOR
--------------------
1. The withholding amount for a cumulative withholding type/code is incorrect in SLA when a Minimum Taxable Base Amount must be subtracted from Base Amount.


The minimum amount to subtract is begin converted to functional amount using Payment Exchange Rate instead of Invoice Exchange Rate

2. Withholding Certificates amount are generated with Payment Exchange Rate, instead of Invoice Exchange Rate.
So SLA withholding amounts are different from Withholding Certificate amounts.

EXPECTED BEHAVIOR
-----------------------
Invoice should be smoothly paid with an ARS payment using the current Exchange Rates.

STEPS
-----------------------
1. Responsibility: Oracle Payable - Argentinean Localization.

Fresh implementation.

2. Path: Invoices -> Entry -> Invoices
3. Query an invoice
4. Validate the invoice
5. Pay the invoice in USD via a System that caters in Argentina Currency, ARS.

Withholding tax amount is incorrect generated on SLA.

The user is paying a USD invoice with an ARS payment.
Changed the following Payment Option from "When Payment is Issued" to "When Payment Clears"
in order to use invoice exchange rate at payment time, and to generate withholding taxes
also with invoice exchange rate.

After doing this change, found the following issues:

1. The withholding amount for a cumulative withholding type/code is incorrect in SLA when a Minimum Taxable Base Amount must be subtracted from Base Amount. The minimum amount to subtract is begin converted to functional amount using Payment Ezchange Rate instead of Invoice Exchange Rate.

2. Withholding Certificates amount are generated with Payment Exchange Rate, instead of Invoice Exchange Rate. So SLA withholding amount are different from Withholding Certificate amounts.

The withholding amount for a cumulative withholding type/code is incorrect.
The withholding certificate amount in functional currency differs from accounted withholding amounts in functional currency.
--> Payment Exchange Rate is the exchange rate defined on Payment Process Request, needed to pay foreign currency invoices
--> Invoice Exchange Rate is the exchange rate defined on Invoice header when currency is foreign (USD)

H&P needs to generate withholding at payment time, but using the invoice exchange rate. The same functionality that existed before patch 8648739

Invoice should be smoothly paid with an ARS payment using the current Exchange Rates.

Note:
Configuration at Payable Option: Accounting Option > Payment Accounting > Account for Gain and Loss > When Payment Clears is enabled. Thus while processing payment system calculates Invoice Exchange Rate and thus Withholding tax amount also is being calculated at Invoice Exchange Rate and in SLA shows correctly.

Now at the Invoice Distribution (AP_INVOICE_DISTRIBUTIONS_V) of Withholding Tax Functional Amount shows as per Payment Exchange Rate and not as per Invoice Exchange Rate and this effects various Reports. The Withholding Certificate Reports does not match with the SLA Accounting Amount of Withholding.


BUSINESS IMPACT
-----------------------
The issue has the following business impact:Unable to pay a Foreign Supplier

Cause

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In this Document
Symptoms
Cause
Solution
References


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