have a look at withholding taxes and retentions in the KIT localisation.

Issue Summary

Withholding tax
Details

GESRTZ Function

Resolution

Definition:

Withholding tax, also called retention tax, is a government requirement for the payer of an item of income to withhold or deduct tax from the payment, and pay that tax to the government. In most jurisdictions, withholding tax applies to salary. Many jurisdictions also require withholding tax on payments of interest or dividends. In most jurisdictions, there are additional withholding tax obligations if the recipient of the income is resident in a different jurisdiction, and in those circumstances withholding tax sometimes applies to royalties, rent or even the sale of real estate. Governments use withholding tax as a means to combat tax evasion, and sometimes impose additional withholding tax requirements if the recipient has been delinquent in filing tax returns or in industries where tax evasion is perceived to be common.

Withholding or retention tax in X3
The function that manages the retention tax in X3 is GESRTZ.
To have this function, you don’t need the Italian legislation.

You just have to check these parameters:

• Make sure that the activity code KIT is active in your folder.

Go to: Parameters > General parameters > Folders: In the Options tab, in the localization bloc: check if the code KIT is active. If not, active it and click on validation (carful the validation can go up 4 hours).

• Development > Data and parameters > Development setting > Activity code
Choose the activity code KIT and tick on Active.

• Parameters> Organizational structure > Companies
Choose your companies and in the accounting tab in the parameters bloc tick on Retention

• Parameters > General parameters > Parameters value
Module= LOC, Group = ITA.
Make sure that the value of parameters ITARTZ and RTZPRW is yes.

• Parameters > General parameters > Parameters value
Module = TC, Group= CUR, Parameter= RTZCUR. Choose your currency retention.
Currency into which the amounts of retention at source are converted. Caution, this parameter has been designed to manage the transition phase for the transfer to the Euro. The management of retentions at source in currency is not managed. In other words, the invoice entry currency must have a fixed rate with respect to the retention currency.

They are too type of retention: retention on Payment and the retention on Invoice.

Example

Retention on Invoice
• Common data > Common tables > Retention management
Creation of a new retention code: RETTRB

In the description tab:
Legislation = TRA, Category of retention = Other, Retention type= On Invoice
Calculation base put “yes” for the charge type, supplier coefficient=1, cash account= “444000”

In the Calc and rate tab:
Calculated bases= Ex tax amount, Partial payment= Proportional, Base threshold = by document, single rate= 20%

• Common data > BP’s > Suppliers
Select your supplier; Example: EURFR024
In the Financial tab on the retentions bloc, add the retention code RETTRB

• A/P-A/R Accounting > Invoicing > Supplier BP Invoices
Creation of a new invoice with retention on Invoice.

In the Header tab:
Choose your site, then select the supplier: EURFR024, Payment terms = CHQ
In the Lines tab: site= T93, Account= 615600, Amount without tax=10.000

Now click on Create.
Total - Tax=8.00=10- (10*20%)
Total Invoice + Tax=9.50
You can see that the retention is automatically applied.
A new line is creating with the retention.

Site TRA Legal B Inv Amt - Tax Tax Inv Amt + Tax
T93 615600 10.00 TR001 11.50
T93 444000 -2.00 -2.00

Retention on Payment
• Common data > Common tables > Retention management
Creation of a new retention code: RETPAY
In the description tab:
Legislation = TRA, Category of retention = Other, Retention type= On Payment
Calculation base put “yes” for the charge type, supplier coefficient=1, cash account= “444000”
In the Calc and rate tab:
Calculated bases= Amount exc tax , Partial payment= Proportional, Base threshold = by document, single rate= 20%

Thank you so much!