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Dynamics 365 Community / Forums / Microsoft Dynamics AX (Archived) / Withholding Income Tax...
Microsoft Dynamics AX (Archived)

Withholding Income Tax Against Vendor Invoice: Subsequent change of Tax Status

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Posted on by Community Member

I am facing an issue that at the time of invoicing as per law Withholding Income tax was not applicable, hence not attached with vendor and invoice thereof generated. But at the time of payment due to subsequent change in law withholding tax i have to withheld tax on those invoices.

I check the Withholding Income tax box (active) and select the Tax group accordingly but when i try to settle the invoice system did not calculate withholding tax.

Please guide.

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  • Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at

    Hi M.KhalidFarooq,

    Have you tested whether you withholding tax setup works at all by entering some demo invoices that are paid later on?

    Best regards,

    Ludwig

  • Community Member Profile Picture
    Community Member on at

    Thanks for your time Dr. Ludwig

    Yeah it work perfectly against current invoices but unfortunately when opening balances of vendor were posted WHT was not activated with vendor, the only way so far I find is to add new line and adjust manually vendor balance against withholding tax.

    Us there any other way to handle this as they are too many to adjust manually.

  • Suggested answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at

    Hi M.KhalidFarooq,

    Except for the manual adjustment, I could imagine that temporarily backdating the 'from date' of your withholding tax could overcome the issue. I have not tested this but believe that it might be worth checking this in a demo environment first.

    Best regards,

    Ludwig

  • Community Member Profile Picture
    Community Member on at

    I already tried that in my test server not worked. I changed my session and system date and activate WHT with vendors but when I create payment journal thereafter it didn't calculate tax.

  • Verified answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at

    Hi M.KhalidFarooq,

    Then I would suggest to go ahead with the manual adjustment. It will be a one time adjustment that you have to do and things will work - as you already checked - fine in the future.

    Best regards,

    Ludwig

  • Community Member Profile Picture
    Community Member on at

    Thank for your precious time sir.

    Have a blessed day and life ahead.

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