AccountAbility will allow you to calculate a withholding tax using pre-defined withholding tax rates. AccountAbility will automatically reduce the supplier payable amount by the amount withheld and post the withholding to a liability account to be paid at a later date.
To Make a Withholding Tax Entry:
1. Search for the supplier invoice and display it on the "Supplier Invoice Form" page.
2. Click the WHT link to access the Supplier Invoice Withholding Tax screen.
3. Select the WHT Tax Code from the drop down menu. AccountAbility will calculate the withholding amount based on the tax rate defined for the Tax Code selected.
4. Verify the tax withholding amount calculated or click the box to and input the corrected withholding amount in the WHT Amount field.
5. Click to return to the Supplier Invoice Form screen.
6. Click to post the supplier invoice to Accounts Payable. Any Withholding Tax entered will take effect when the invoice is paid.
Withholding adjustments can only be made to unapproved supplier invoices. If you need to make a WHT entry to an approved invoice, you will need to unapprove the invoice first.
After approval of a supplier invoice that has a WHT entry, the full amount of the payable will still remain in Accounts Payable. When payment is generated for the payable, any withholding amounts that have been entered will appear in the WHT Amount column on the Pay Supplier Invoice screen. The WHT amount can still be adjusted or cancelled at the time the supplier payment is generated. If the original entry is accepted, the withholding adjustment will be posted to the liability account defined in the WHT Code setup when the payment is approved.