To trigger the unrealized withholding tax amount to become a realized amount in BC

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Posted on by CU23061502-0

In Business Central the Realized Withholding Type has been set to Payment, after posting a purchase invoice the withholding tax entry shows the unrealized WHT amount, and finally we post the payment journal line with the application to the corresponding purchase invoice, this invoice would be cleared and closed.

Logically the unrealized amount would be now converted to realized amount cause we issued the payment. However, it remains always unrealized and the unrealized amount would not be deducted in the Calc. and Post WHT Settlement report.

May I ask Why.

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Dynamics 365 Business Central

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Mansi Soni 10,182 Super User 2026 Season 1 on at

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Hello @CU23061502-0,

If Realized Withholding Type = Payment, Business Central should only convert the WHT from unrealized to realized when the payment transaction triggers the WHT realization process. Simply applying and posting a payment journal against the purchase invoice does not always update the WHT entry to realized status unless the localization's WHT functionality is designed to perform that conversion during payment posting.

As a result, the WHT entry remains unrealized, and the Calc. and Post WHT Settlement report only considers realized/open WHT entries that are eligible for settlement, so the unrealized amount is excluded from the settlement calculation. Therefore, the behavior is typically related to the WHT setup and localization-specific realization logic rather than the invoice application itself.

Hope this answer helps you!

If this answer helps you kindly mark it as Verified!

Regards,
Mansi Soni

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