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Dynamics 365 Community / Forums / Microsoft Dynamics GP (Archived) / Withholding (WHD...
Microsoft Dynamics GP (Archived)

Withholding (WHD) Tax on Payment

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Posted on by Shahid Ghafoor 1,445

On the payment, it is require to deduct tax (Which is called Withholding Tax)  and then later deposit it to Government Department according to the Tax department regulation.

 If I made a payment bill to bill, the distributed account is correctly distributed in the following way:

 DR - Vendor Account  $10,000

 CR - Bank Account     $9,650

 CR - Withholding Tax Account  $350

But when I made half Bill payment, only the following distributed accounts hits:

 DR - Vendor Account  5,000

 CR - Bank Account     5,000

 instead of the following :

  DR - Vendor Account  5,000

 CR - Bank Account     4825

 CR - Withholding Tax Account  175

 Mean , if we made payment less than a bill, Tax Account not hits.

How we can control this situation.

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  • L Vail Profile Picture
    L Vail 65,271 on at
    Re: Withholding (WHD) Tax on Payment

    What country is this for?

  • Shahid Ghafoor Profile Picture
    Shahid Ghafoor 1,445 on at
    Re: Re: Withholding (WHD) Tax on Payment

    1st thanks for respond 

    Actually,you know, GP have the option of withholding tax on the payments.

    My problem is related to GP  regardless of a country!

    On Bill to Bill payment withholding tax account is correctly hit in the distribution accounts, but on half bill payment, GP omit the tax account in distribution account!

    How we can control this

     Please mention the solution in detail !

    Thanks

  • Verified answer
    L Vail Profile Picture
    L Vail 65,271 on at
    Re: Re: Re: Withholding (WHD) Tax on Payment

    Gosh Shahid,

    So many exclamation points! I am trying to help you.

    The documentation says that when the invoice is paid off it calculates the withheld amount automatically. If you are paying off a different amount - just half in your example - then you will have to do the calculation and change the entries yourself.

    This is controlled through the Apply Payables Documents window. For your $10,000 invoice you would put $4,825 in the apply amount field. Expand the row so you can see the Write Off field. Put 175 in the Write Off field and tab off of the line. Go back to that line and click the blue column heading 'Write Off'. This will open the 'Additional Purchasing Tax and Writeoff Distributions' window.

    In the lower right corner of the window you will see the field 'Withholding Amount'. Make sure the $175. is in that field. The Amount Remaining on this invoice should now be $5000. On the Print Checks window you can navigate to the Options menu and print the withholding report.

    When you pay the other half of the invoice, the other $175 will automatically calculate. 

    In your example, I suspect you put in the apply amount to $5000. GP does not calculate the % you paid. You have to put it in the Write off field, etc. in order to do what you want.

    I asked about the country because of other implications. Each country does not follow the same rules.

    That's it. GP is behaving as designed.

    Kind regards,

    Leslie

  • Community Member Profile Picture
    Community Member on at
    Re: Re: Re: Re: Withholding (WHD) Tax on Payment

    Hi Leslie,

    You have rightly suggested to Shahid. I guess the country is Pakistan. Furthermore, Shahid will have to face such problem in case of Advance Payments to Suppliers as well.

    Regards,

    Atta-Ur-Rahman

    [quote user="L Vail"]

    Gosh Shahid,

    So many exclamation points! I am trying to help you.

    The documentation says that when the invoice is paid off it calculates the withheld amount automatically. If you are paying off a different amount - just half in your example - then you will have to do the calculation and change the entries yourself.

    This is controlled through the Apply Payables Documents window. For your $10,000 invoice you would put $4,825 in the apply amount field. Expand the row so you can see the Write Off field. Put 175 in the Write Off field and tab off of the line. Go back to that line and click the blue column heading 'Write Off'. This will open the 'Additional Purchasing Tax and Writeoff Distributions' window.

    In the lower right corner of the window you will see the field 'Withholding Amount'. Make sure the $175. is in that field. The Amount Remaining on this invoice should now be $5000. On the Print Checks window you can navigate to the Options menu and print the withholding report.

    When you pay the other half of the invoice, the other $175 will automatically calculate. 

    In your example, I suspect you put in the apply amount to $5000. GP does not calculate the % you paid. You have to put it in the Write off field, etc. in order to do what you want.

    I asked about the country because of other implications. Each country does not follow the same rules.

    That's it. GP is behaving as designed.

    Kind regards,

    Leslie

    [/quote]
  • L Vail Profile Picture
    L Vail 65,271 on at
    Re: Re: Re: Re: Re: Withholding (WHD) Tax on Payment

    Thank you for clarifying,

    I felt a little in the dark on that last one.

    Kind regards,

    Leslie

  • Shahid Ghafoor Profile Picture
    Shahid Ghafoor 1,445 on at
    Re: Re: Re: Re: Re: Re: Withholding (WHD) Tax on Payment

     Thanks Leslie Vail for provides the solution with detail explanation. Actually, Leslie, I have handled this situation with my own way. But for the best solution I consult the Forum.


    Regards,

    Shahid Ghafoor

  • Shahid Ghafoor Profile Picture
    Shahid Ghafoor 1,445 on at
    Re: Re: Re: Re: Re: Withholding (WHD) Tax on Payment

     Atta-Ur-Rahman Malik correctly guesses the country because it relates to that country.And you are right about “Advance Payments to Suppliers”

     Regards,

    Shahid Ghafoor

  • Community Member Profile Picture
    Community Member on at
    Re: Re: Re: Re: Re: Re: Withholding (WHD) Tax on Payment

    In case you find in problem handling the said scenario, do lemme know then.

  • Shahid Ghafoor Profile Picture
    Shahid Ghafoor 1,445 on at
    Re: Re: Re: Re: Re: Re: Withholding (WHD) Tax on Payment

    Leslie, I take a practice to control the withholding according to prescribed method after a long discussion. but i have some query  this regard !

    (Please read the following scenario)

    While payment to vendor of $50,000/- , I write-off some of amount as a withholding tax that will deposit to the government tax department. Suppose tax amount is 1750/-

     The following distribution accounts are:

    DR – Accounts Payable   50,000
    CR – Tax Account    1,750
    CR – Bank Account    48,250

    Now I go to enquiry the creditor’s summary enquiry - Inquiry >> Purchasing >> Creditors Summary

    It shows the following:

    Period

    		 Debit Credit Net changes
      48,250 50,000 (1750)
           
           
           
           
    TOTAL 48,250 50,000 (1750)

     

    According to the documentation of MS Dynamics GP 10.0

     

    Use the Vendor Summary Inquiry window to view vendor summary information in a debit/credit format, where debits are payments and credits are purchases.

     

    The summary shows that we have pay less than the purchases. But the scenario is different. We have deducted tax from the payment that will deposit to the government tax department. Therefore the balance of creditor is zero while summary show that we have to pay 1750 to the creditors.

     

    How we can control this type situation while using the write-off in “Apply Payable Documents” window.

     

    Regards,

     

     

    Shahid

  • L Vail Profile Picture
    L Vail 65,271 on at
    Re: Re: Re: Re: Re: Re: Re: Withholding (WHD) Tax on Payment

    Shahid,

    You've got me on that one. As far as I can tell, the system is 'working as designed'. The amount being written off does not change that there was a 48,250 debit against a 50,000 bill. This window shows information involving you and the vendor, it does not consider the write off. From the Sales and Purchases aspect, the information is correct. You could probably modify these amounts with some programming, but that is not an easy answer.

    Kind regards,

    Leslie

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