Applying the Withholding tax

Setup

In order to apply the Withholding tax code during the payment of a supplier invoice, you must setup the account and the supplier.

Account

Open: Common data > General accounting tables > Account

Set the Account to Charges.

Supplier

Open: Common data > BPs > Suppliers

Select the applicable withholding tax code for the supplier.

View the withholding tax amount

When you create an invoice for a supplier with a withholding code, you will see an additional proforma window appear.

You can also check the amount of withholding: click the Withholding on payment action:

Limitations

Partial Payment

Withholding management will apply the full amount of withholding even if you only paid a partial amount. For this reason, partial payments should not be applied to withholding invoices.

Direct Payment

When you make a payment without an invoice in Payment/Receipt Entry (GESPAY), there will be no tax withheld from the payment. Only payments that relate to an invoice will apply the withholding code.