Hi Anu
Checked with my colleague just now
He confirmed that there will be no deduction of tax either at Invoice or Payment. The Tax codes are created with 0% rate
But the existence of Tax code in the Vendor master is mandatory, because system captures the WHT base Amount, Tax code etc at the time of Payment. These are mandatory for 1099 reporting.
For any retroactive changes,
1) You will need to run program RFWT0020 to flag 1099 items retroactively.
2. And/or you can change the "Document Change rules" for BSEG-QSSHB and BESG-QSSKZ for account type "K" so that you can change the Withholding tax code (Refer to OSS Note: 363650).
Hope this helps
Ajay M
