The Withholding tax feature found in the Settings tab enables businesses to handle tax withholding requirements where customers or suppliers are required to withhold tax from payments.
Withholding tax is a government requirement in many jurisdictions where the payer must deduct tax from payments and remit it directly to tax authorities. This feature allows you to track both withholding tax receivable (when customers withhold tax from payments to you) and withholding tax payable (when you withhold tax from payments to suppliers). The withheld amounts are recorded separately from the main transaction, ensuring accurate tracking for tax compliance.
Enable withholding tax receivable if your customers are required to withhold tax from their payments to you. Enable withholding tax payable if you need to withhold tax when paying suppliers. Once enabled, withholding tax fields will appear on relevant invoices, and the system will automatically calculate and track these amounts.
The form includes these fields:
There are following fields:
Enable this option to track withholding tax that customers deduct from payments to you.
This creates a Withholding tax receivable account on your balance sheet to monitor the withholding tax balance for each customer.
When enabled, a Withholding tax section appears when creating new Sales Invoices and Credit Notes, allowing you to specify withholding tax amounts.
Withholding tax amounts accumulate in the Withholding tax receivable account. Clear this account by recording entries in the Withholding Tax Receipts tab.
Enable this option to track withholding tax you must deduct from payments to suppliers.
This creates a Withholding tax payable account on your balance sheet to monitor the withholding tax balance for each supplier.
When enabled, a Withholding tax section appears when creating new Purchase Invoices, allowing you to specify withholding tax amounts.