What is tax detraction in SAP FI-AR - Accounts Receivable?

SAP Term: tax detraction

• Component: FI-AR

• Component Name: Accounts Receivable

• Description: In Peru, a tax collection mechanism, in which the customer withholds a certain percentage from the payable amount before paying the invoice and deposits that amount to the National Bank Banco de la Nación in the name of the supplier, which in turn, uses the amount deposited to make the tax payment. When sending the invoice, the supplier also sends a statement to the customer about the details of the detraction that the customer must make. Upon paying the invoice, the customer sends the bank receipt about the deposited tax amount to the supplier. The mechanism is known in Spanish as 'detracción de impuestos'.

Smart SAP Assistant

• Key Concepts: 
  Tax detraction is a feature of the FI-AR Accounts Receivable component of SAP. It allows companies to deduct taxes from their accounts receivable, reducing the amount of money they owe to their customers. This feature is especially useful for companies that have a large number of customers and need to manage their accounts receivable efficiently.
  
  How to use it: 
  To use tax detraction in SAP, first set up the tax detraction parameters in the FI-AR Accounts Receivable component. This includes setting up the tax rate, the type of tax (e.g. VAT or sales tax), and any other relevant information. Once this is done, you can then enter the customer’s account information and select the “tax detraction” option when entering the invoice. This will automatically deduct the applicable taxes from the customer’s account. 
  
  Tips & Tricks: 
  When setting up tax detraction in SAP, make sure to double-check all of your parameters to ensure accuracy. Additionally, it is important to keep track of any changes in tax rates or other relevant information, as this could affect your accounts receivable. 
  
  Related Information: 
  For more information on tax detraction in SAP, please refer to the official SAP documentation or contact your local SAP support team.