Withholding tax in sales transactions

This article lists the steps to enable the calculation of withholding tax for selected customers. For customers who specify withholding tax in their payments to you, you can assign the default Withholding tax group on the Customers page.

1. Go to Navigation pane > Modules > Accounts receivable > Customers > All customers.

2. Click the respective customer account, click Edit.

3. In the Invoice and delivery tab, set the Calculate withholding tax field to Yes.

   Note

   Withholding tax will not be calculated if Calculate withholding tax is not switched on for this customer in the master data.

4. Select a withholding tax group in Withholding tax group.

5. Click Save.

For items/services, which are liable to withholding tax, you can assign the default Item withholding tax group in Released Products.

1. Go to Navigation pane > Modules > Product information management > Products > Released products.

2. Click the respective Item number, click Edit.

3. In the Sell tab, click Calculate withholding tax.

   Note

   Withholding tax will not be calculated if Calculate withholding tax is not set to Yes for this Item in the Sell tab on the Released product page.

4. Select an Item withholding tax group in Item withholding tax group list.

5. Click Save.

Withholding tax groups and Item withholding tax groups can be assigned using the Sales order page.

The default Withholding tax group and Item withholding tax group is used as default entries on sales order lines when you create a new sales order.

Note

Starting in version 10.0.32, the Withholding tax group and Item withholding tax group fields are integrated into the lines on the Free text invoice page. Withholding tax is calculated and posted when free text invoices are settled.

Withholding tax is calculated and posted with Customer payment journal. You can manually adjust the applicable withholding tax code and the actual withholding tax amount in the Withholding tax tab on the Settle transactions page.

The calculated withholding tax amount is deducted from the customer payment and posted to the Withholding tax offset account in a related voucher.