How to: Set Up Withholding Tax
Companies must pay withholding tax to the government for third-party services and vendor purchases. Withholding tax is calculated during invoice payment rather than during invoice posting.
To set up withholding tax codes
In the Search box, enter Withhold Tax, and then choose the link for the Setup area for payables.
Under Lists, choose Code.
To open a new withholding code, on the Home tab, choose New.
Enter information into the relevant fields.
To open add lines to the withhold code, on the Navigate tab, choose Withhold Code Lines.
Enter information into the relevant fields.
Choose the OK button.
To close the Withhold Codes window, choose the OK button.
To set up withholding tax for vendors
In the Search box, enter Vendors, and then choose the related link.
Select the relevant vendor, and then, on the Home tab, in the Manage group, choose Edit.
Fill in the FastTabs as described in the following table.
FastTab Description General
The vendor personal data.
Communication
The contact details for the vendor.
Invoicing
The invoicing details for the vendor.
Payments
The payment information for the vendor.
Receiving
The subcontracting information for the vendor.
Foreign Trade
The foreign trade information for the vendor.
Free Lance Fee
Select the relevant withholding tax code in the Withholding Tax Code field to include the withholding tax information.
To close the Vendor Card window, choose the OK button.
To calculate withholding tax for purchase invoices
In the Search box, enter Purchase Invoices, and then choose the related link.
Select the relevant purchase invoice, and then on the Home tab, in the Manage group, choose Edit.
On the Navigate tab, in the Invoice group, Choose Withhold Taxes-Soc. Sec..
In the Withh. Taxes-Contribution Card window, on the Withhold Taxes FastTab, in the Withholding Tax Code field, select the code for the withholding tax.
To calculate the withholding tax amount before posting, on the Home tab, in the Process group, choose Calculate.
Choose the OK button.
To make a vendor payment
In the Search box, enter Payment Journals, and then choose the related link.
In the Batch Name field, specify the relevant journal batch.
To create a new payment journal line, enter the relevant information in the fields.
To make a vendor payment, on the Home tab, in the Process group, choose Post.
Note
The amount in the new line in the Payment Journal window is the withholding tax payment amount.
To close the Payment Journal window, choose the OK button.
See Also
Tasks
How to: Print Withholding Tax Reports