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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.
- Go to Tax > Indirect taxes > Withholding tax > Withholding tax codes.
- Select New.
- In the Withholding tax code field, type a value.
- In the Withholding tax name field, enter the name of the withholding tax code.
- In the Main account field, select the main account for posting the withholding tax liability.
- Select Save.
- Select Values and mark the desired record in the list.
- In the Value field, enter a percentage used for the calculation of the withholding tax.
- Select Save.
- Close the page.
- Select Save.
- Close the page.
- Go to Tax > Indirect taxes > Withholding tax > Withholding tax groups.
- Select New.
- In the Withholding tax group field, enter the identifier of the withholding tax group.
- In the Description field, enter the name of the withholding tax group.
- In the Withholding tax code field, select the withholding tax code.
- Select Save.
- Close the page.