Withholding Tax Journal in Microsoft Dynamics 365 finance and Operations: Part-2

In this blog I will explain about how we can post withholding tax adjustments using withholding tax journal in D365.In previous blog of withholding tax I have explained overall end to end process , so if you have not read then click here to go through it:

https://exploredynamics365.home.blog/2020/06/27/withholding-tax-tds-tcs-end-to-end-process-configuration-transaction-settlement-authority-payment-with-challan-details-and-report-in-microsoft-dynamics-365-finance-and-operations-part-1/

So, let’s understand in which scenario we need to use withholding tax journal, here are few:

1. User forgot to deduct withholding tax on vendor invoice
2. User forgot to deduct withholding tax on payments
3. Wrongly deducted withholding tax on invoice or payments
4. Wrong amount deducted on invoice or payment

All these adjustments can be made using withholding tax journal which will also have impact or create transaction in posted withholding tax report in Tax module, if we will post simple journal entry then it will not reflect in Tax transactions (Subledger transaction will not be created).

Let’s understand complete process with following scenario:

Scenario: User posted a Invoice and forgot to deduct on invoice, now user wants to post withholding tax against that invoice, so expected entry for user is:

Vendor Debit

                 Withholding Tax Credit

Step-1: Create General Journal

Navigate to, General Ledger > Journal Entries > General Journal > New > Lines

Step-2: Create Withholding tax Journal and select Withholding Tax type, Group and Direction

Step-3: Select transaction and link with Tax journal

Step-4: Select Offset Account and Base Amount > Calculate Tax

Step-5: Transfer To Journal Line and Post

Step-6: View Transaction in Tax transaction and vendor transactions

That’s it for this blog, hope this will help in your implementation.

Thank you!!! Keep reading and sharing !!!