Withholding Tax

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1.0 Create Withholding Tax Account

1. Go to Accounts > Chart of Accounts
2. Under Liabilities, click Add Child Account
3. Enter:
   • Account Name: e.g., Withholding Tax Payable
   • Account Type: Payable
   • Currency: Default company currency
4. Click Save

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1.1 Set Up Tax Withholding Category

1. Navigate to Accounts > Setup > Tax Withholding Category > New
2. Enter:
   • Title (e.g., WHT 5% Services)
   • Rate (e.g., 5%)
   • Tax Account (select Withholding Tax Payable)
3. Add Applicable Document Types: typically Purchase Invoice and Payment Entry
4. Click Save

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1.2 Assign WHT Category to Suppliers

1. Go to Buying > Supplier
2. Open the supplier record
3. In the Tax Settings section:
   • Select the Tax Withholding Category created
4. Click Save

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1.3 Apply WHT in Purchase Invoice

1. Navigate to Buying > Purchase Invoice > New
2. Select a supplier with WHT enabled
3. Add item details and ensure the Total is populated
4. The Tax Withholding section will automatically show:
   • Withholding Tax Rate
   • Withholding Tax Amount
   • Net Payable Amount
5. Click Save and Submit

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1.4 Apply WHT in Payment Entry

1. Go to Accounts > Payment Entry > New
2. Set:
   • Payment Type: Pay
   • Party Type: Supplier
   • Select a supplier with WHT
   • Link the corresponding purchase invoice
3. The system auto-calculates the WHT and reduces the Payable Amount accordingly
4. Click Save and Submit