Description
This report creates the 1042 forms and an output file with thecorresponding values. All vendor clearing documents with withholdingtax are selected, provided they were posted in one of the specifiedcompany codes and the vendor fulfills the prerequisites describedbelow.

Precondition

Company code
The company code corresponds to the "Agent" for retaining and reportingthe 1042 withholding tax.

Address
The address must be maintained in full for each "Agent". For electronicreporting, in particular, the first line of the name, the street andhouse number, the postal code, the city and the state are required.

Additional specifications
The tax number must be maintained for each "Agent" as an additionalspecification for the company code. The tax number should be entered asa string of digits, without any special characters. Also see ReleaseInformation FI_22A_QUELLENSTEUER.

Vendor
A vendor is selected by the report if he/she has entered a withholdingtax country in the master record which differs from the company codecountry. The withholding tax country should not be confused with thecountry in the vendor address.
For 1042 reporting, the vendor must also be assigned to a withholdingtax category (Type of Recipient).
If you want to exempt the vendor from withholding tax, proceed asdescribed in the general withholding tax documentation. 1042 alsorequires, however, a reason for the exemption. The reason should bemaintained in the master record.

Setting up the withholding tax indicator and formulas
For the output in the column 'Income Code', the withholding tax coderather than the withholding tax indicator is used. The taxable portionfor determining the base amount must always be 100% for the withholdingtax indicator for 1042.
The tax rate is stored in the formula. The currency in the formulashould be the same as the currency for the company code. Enter themaximum possible value as the to-amount.
You should store an entry in which the country is masked with blanksfor all countries which you do not explicitly define.
For stipends (Income Code 15) you divide the annual allowance by thenumber of expected payments. The value calculated is entered in thebase amount reduction field.
If the tax rate changes, you should create a new indicator. The twopercentage rates are then displayed separately in reporting.

Description of countries / regions
All country and region descriptions must be maintained in the companycode language.

Output file
To create an output file, the logical file FI_TAX1042S must be definedfor your installation. For this, also see the FI_22A_QUELLENSTEUERrelease information.
At the start of the report, additional data for the creator'Transmitter' and any payer of the tax payable who differs from thecompany codes / agents must be entered for the output file.
Any output file which already exists is overwritten.

Output
The main function of the report is to create the 1042 forms. The formscan also be output on a file. The format of the file corresponds to therequirements of the IRS.
There are four print or file outputs to choose from:

• 1042 forms


• Report with the payables from the retained taxes. The report can be
used to fill-in form 1042.

• Log of values under review with two possible summarization levels.


• Output file for 1042s

In addition, a brief log is created.