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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Answers (1)

joegay 370 on at

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RE: Withholding (WHD) Tax on Payment

Hi Leslie,

So how does all this fit into SOP since my challenge has been with automating the withholding tax calculation in SOP for v2013R2.

Earlier version like 10.0 used to have the sales tax setup window but notice it has been removed from this version.

I will be grateful if you could be of help.

Thanks.

Joegay.
Community Member Microsoft Employee on at

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RE: Withholding (WHD) Tax on Payment

Hi

I am using withholding tax feature in GP 2010, I setup a vendor T00-0009 as withholding vendor and define default GL accounts for payable, purchase and writeoff type.

When I entered a manual payment to vendors and apply it to an invoice subject to withholding, I have to enter manually the Withholding Account in the distribution window. Again I have also to enter manually the Purchase account in corresponding invoice created for the withholding vendor T00-0009.

How can I add Withholding Account by default?

Farukh Naveed
Sanjay Kumar Rajarao 214 on at

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Re: Re: Re: Re: Re: Re: Re: Re: Re: Withholding (WHD) Tax on Payment

All:

In my case the country is US and we need to deduct foreigh with holding taxes. In my GP installation I and finding the navigations as listed in taxadministration guide. Which component needs to be installed for getting the with holding

Thanks

Sanjay
Shahid Ghafoor 1,445 on at

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Re: Re: Re: Re: Re: Re: Re: Re: Withholding (WHD) Tax on Payment

Leslie,
1st thanks to respond. but how we can control the withholding tax (as discussed above on half bill payment) in GP 10.0 in the way that every default report must be accurate because my company can not afford the additional cost on additional programming and customization because default reports are enough for records and reporting purpose.

Dynamics Regards,

Shahid
L Vail 65,271 on at

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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
Shahid Ghafoor 1,445 on at

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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
Community Member Microsoft Employee on at

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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 1,445 on at

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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
Shahid Ghafoor 1,445 on at

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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
L Vail 65,271 on at

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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