Set up withholding tax

This article explains how to set up withholding tax. Withholding tax is a tax on vendors that does not create sales tax transactions. Withholding tax that is calculated on vendor payments is a liability. Therefore, only balance sheet accounts or liability accounts are valid accounts for posting withholding tax. This task guide demonstrates how to set up withholding tax.

1. Go to Navigation pane > Modules > Tax > Indirect taxes > Withholding tax > Withholding tax codes.
2. Select New.
3. In the Withholding tax code field, type a value.
4. In the Withholding tax name field, enter the name of the withholding tax code.
5. In the Main account field, select the main account for posting the withholding tax liability.
6. Select Save.
7. Select Values and mark the desired record in the list.
8. In the Value field, enter a percentage used for the calculation of the withholding tax.
9. Select Save.
10. Close the page.
11. Select Save.
12. Close the page.
13. Go to Navigation pane > Modules > Tax > Indirect taxes > Withholding tax > Withholding tax groups.
14. Select New.
15. In the Withholding tax group field, enter the identifier of the withholding tax group.
16. In the Description field, enter the name of the withholding tax group.
17. In the Withholding tax code field, select the withholding tax code.
18. Select Save.
19. Close the page.