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Dynamics 365 Community / Forums / Finance | Project Operations, Human Resources, ... / Reverse vendor payment...
Finance | Project Operations, Human Resources, ...
Suggested Answer

Reverse vendor payment with withholding tax

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Posted on by namng.finance 5

Dear experts,

We are not sure how to reverse vendor payment via payment journal which includes withholding tax.

Firstly, we have to unsettle the payment and related invoice which automatically creates a reversed journal for withholding tax voucher only.

pastedimage1658461425215v1.png

Secondly, since we can't reverse the remaining payment journal on vendor transactions screen with type = Bank

pastedimage1658461722979v2.png

=> we have to create a new payment journal to settle with the remaining amount of original payment journal.

=> even though the balances are cleared, the original payment journal is still shown on related tax report (i.e, Posted withholding tax) while the reversal is not, which is not right.

Any suggestion for us to solve this issue is highly appreciated.

Thanks & Best regards,

Nam

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  • Suggested answer
    Jacovdm3 Profile Picture
    Jacovdm3 152 on at

    Hi Nan,

    There are various methods and I am sure some of the community will have other methods to share, but here is what I would have done.

    1. Unsettle the Invoice from the Payment.

    2. Create a credit note (Basically just creating an invoice journal line with a reversed amount), but importantly is to use the same Item Tax Group and Tax group. The tax code on the transaction is causing the transaction to appear in Tax reporting.

    3. Settle the payment and the Credit note with one another.

    4. The invoice will be available for payment again, if you do not want it, you can reverse the invoice.

    Hope this helps.

    Kind regards,

    Jaco

  • Ankit Life Profile Picture
    Ankit Life 687 on at

    Hi,

    For which country this WHT is using?

    Was withholding tax first deducted on Vendor Invoice(PO or Vendor invoice journal) and net payment made to Vendor or was it on Advance payment to Vendor?

    Regards,

    Ankit Arora

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