C_TS4FI Financial Accounting Practice Question
A financial accountant needs to post a customer invoice that includes a withholding tax. The company requires that the withholding tax is calculated automatically during invoice entry. Which configuration element must be maintained to enable automatic withholding tax calculation?
⚠ Common exam trap
Candidates often confuse the withholding tax type (configuration) with the withholding tax code (master data assignment); only the latter triggers automatic calculation.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
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Withholding tax code assigned to the business partner master record
Automatic withholding tax calculation is triggered by the withholding tax code stored in the business partner master record. This code links the business partner to the withholding tax type and rate, enabling the system to compute the tax during invoice posting. Configuration of withholding tax types and codes is a prerequisite, but the assignment to the business partner is what activates the calculation for that partner.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
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Withholding tax jurisdiction code assigned to the company code
Why it's wrong here
The jurisdiction code is used for tax calculation in certain countries (e.g., USA, Canada) and is assigned to the business partner or entered manually. It is not assigned to the company code. While jurisdiction codes can influence tax rates, they are not the primary configuration element for automatic withholding tax; the withholding tax code on the business partner is required.
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Withholding tax base amount maintained in the G/L account master record
Why it's wrong here
The withholding tax base amount is determined during document entry, not stored in the G/L account master. G/L account master data holds control parameters like account currency and tax category, but not withholding tax base amounts. Withholding tax calculation uses the line item amount and the business partner's withholding tax code to compute the base and tax.
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Withholding tax type defined in the company code global parameters
Why it's wrong here
Withholding tax types are defined at the country level and are used in configuration, but they are not assigned in company code global parameters. The company code settings control other defaults like fiscal year variant and chart of accounts. Assigning a withholding tax type there would not trigger automatic calculation for a specific business partner; the assignment must be on the business partner.
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Withholding tax code assigned to the business partner master record
Why this is correct
Withholding tax codes are defined in configuration and then assigned to the business partner master record (customer or vendor). The code determines the tax type, rate, and the G/L accounts for the withholding tax liability. When posting an invoice, the system checks the business partner's withholding tax code and automatically calculates the tax based on the base amount. Without this assignment, automatic calculation does not occur.
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JA
Written and reviewed by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
Last reviewed September 2026 · checked against the official SAP exam blueprint
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