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Dynamics 365 Community / Forums / Finance | Project Operations, Human Resources, ... / Withholding tax tempor...
Finance | Project Operations, Human Resources, ...
Suggested Answer

Withholding tax temporary calculation on PO

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Posted on by LIN LIN 99
Hi All,
I can't see the calculation result for withholding tax in PO. I've already open the parameter and select both item WH TAX and WH tax group on procument category line. Anyone could help on this?
 
 
 
 
 
Categories:
Dynamics 365 Finance
I have the same question (0)
  • Suggested answer
    Saif Ali Sabri Profile Picture
    Saif Ali Sabri 2,351 Super User 2025 Season 2 on at
    To see the withholding tax calculation in a Purchase Order (PO), ensure the following:
    1. Withholding Tax Setup: Confirm that the withholding tax codes, groups, and item groups are properly configured under Tax > Setup > Withholding tax.
    2. Vendor Setup: Make sure the Withholding tax group is assigned to the vendor under Accounts payable > Vendors > All vendors > Tax information.
    3. PO Line Configuration: On the PO line (not just the procurement category), verify that:
      • A Withholding tax item group is applied.
      • The procurement category is correctly linked to the withholding tax item group.
    4. Calculation View: Withholding tax isn’t shown directly on the PO form. Instead:
      • Go to Invoice > Invoice journal after posting, or
      • Check Tax > Withholding tax transactions from the PO or invoice journal to view the calculated amount.
    If you're still not seeing results, try simulating the invoice posting in a test environment to trigger the calculation.
  • LIN LIN Profile Picture
    LIN LIN 99 on at
    Hi Expert,
    it seems could view withholding tax direct on the PO. And also when I test the pending vendor invoice (create pending vendor invoice without PO) the withhold tax not effective. But based on the posting it seems could work. Do you have any idea how I can get this function?
  • Suggested answer
    Arvind Bharti Profile Picture
    Arvind Bharti 774 Super User 2025 Season 2 on at
    Hi,
     
    Did you also select on Vendor? because withhlding is for vendor?
  • Suggested answer
    Saif Ali Sabri Profile Picture
    Saif Ali Sabri 2,351 Super User 2025 Season 2 on at
    With the “Withhold tax calculation during invoicing” feature (added via Feature management), Dynamics 365 Finance allows withholding tax to be calculated and viewed during invoice entry, including on PO invoice lines and pending vendor invoices.
    Here's what you need to check to activate and use this feature properly:
    ✅ 1. Enable the Feature
    • Go to System administration > Workspaces > Feature management.
    • Search for “Withhold tax calculation during invoicing”.
    • Enable the feature and complete any required database synchronization.
    ✅ 2. Check Withholding Tax Parameters
    • Navigate to Accounts payable > Setup > Accounts payable parameters.
    • Under the Sales tax tab, ensure Calculate withholding tax is set to "Yes".
    ✅ 3. Vendor and Tax Setup
    • Make sure the vendor has a valid withholding tax group.
    • Ensure the procurement category or item used has the correct withholding tax item group.
    ✅ 4. Test in Pending Vendor Invoice
    • Create a Pending vendor invoice.
    • Add a line, and before posting, click Invoice > Tax > Withholding tax to view the calculation.
      • If this doesn’t show anything, verify that:
        • The vendor and item group setup are correct.
        • You’re using a category or item that has a matching setup.
        • The tax code has valid effective dates and thresholds.
    🟡 Note:
    This feature enables on-screen preview of withholding tax during invoice entry but does not affect the PO form directly — it’s visible only at invoice level (PO invoice or pending invoice), not at PO creation.

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