Withholding tax and Pension Fund - Ritenuta di acconto e fondo pensione
Video of setup and flow
What is the withholding?
The ritenuta d’acconto is an Italian withholding tax applied mainly to payments for freelancers and occasional workers. The client (as “tax substitute”) withholds usually 20% of the fee and pays it directly to the tax office as an advance on the worker’s income tax.
At year-end, the withheld amounts are credited against the taxpayer’s final tax bill, reducing what they owe or generating a refund.
Only VAT-registered customers can (and should) be withholding agents. Therefore, if you have sold goods or services to an individual without a VAT number, you will not have to enter withholding tax on the invoice.
Basic Configurations:
1. Install this module:
2. Turn on the "Cash basis" setting in Odoo (Cash basis means that you will pay those taxes only when you register a payment on that invoice)
Accounting -> Configurations -> Settings
3. Check taxes:
Under Accounting -> Configurations -> Taxes
As default you will find the following taxes:
- 20% RIT PF: Ritenuta Persone Fisiche
- 20% RIT PG: Ritenuta Persone Giuridiche
- 23% RIT AG: Ritenuta Agenti e Rappresentanti
You can eventually create new withholding taxes, make sure to select the right Tipo Ritenuta and causale ritenuta when you create a new one.
What is the Pension Fund and Contributo INPS?
The INPS contribution is a surcharge--up to 4 percent--that is levied on gross fees billed by freelancers enrolled in the Separate Management Fund. This percentage can be billed to clients as a social security contribution.
Those contributions are handled in Odoo as taxes
Basic Configurations:
You should be able to find the following taxes:
- 4% INPS: Contributo INPS
- 4% F.Pens: Contributo Fondo Pensione
You can eventually create new Tipo Cassa by creating new taxes. You create them following the settings of the existing ones, but make sure to select the right tipo cassa, so Odoo can recognize the right one when importing vendor bills from the SDI. 
Flow:
1. Create a vendor bill:
Waiting for the payment, Odoo will store the withhilding tax amount in a suspense account Debiti per ritenuti da versare (appoggio)
2. Register the payment
The following first note entry will be created for the cash base. The withholding tax amount go from the Debiti per ritenute da versare (appoggio) to the final account Debiti per ritenute da versare.
Once the invoice is paid, the amount due on the invoice is set to 0.
Fiscal Report
A new withholding tax report is available: Accounting - > Reporting - > Tax Report - > Select Withholding Tax Report
