Withholded tax deduction at PURCHASE transactions

Hello,

Have you looked at quick entries?

I have done something similar to what you are looking for using quick entries for vat on items acquired from EU, where I have to pay local vat on these items.

Hi, and thank you. I have to try, are the stock quantities adjusted with quick entries?

I am now bumped into same issue how to do Withholding Tax /w FA

@apmuthu, can you elaborate more on this solution ?

For example, we have Mr.John as airconditioning repairman who did $100 job on our company.
This $100 is further broken down to :
- $98 Supplier Invoice to John and
- $2 Withholding Tax for John that our company must pay on behalf of Mr. John

How do we do it ?

If we do it using your solution above the Supplier Balance would remain $100, wouldn't it whereas it should've been only $98

Thanks

I can do the latest step using manual journal entry. that's no problem. it'll just be ugly way to do things around withholding tax. I'm trying to get it done under what's supposed to be by inputting onto Supplier Invoice

Maybe There's something that i'm missing because the entry generated by Supplier Invoice operation are not what I would have expected it would be /w Withholding Tax component

Ok. So the following setup is what I have done so far :

1. Set a new Tax in Setup -> Tax named "Withholding Tax" with its
    Sales GL Account to "Withholding Tax Payable"
    and
    Purchasing GL Account also to the same "Withholding Tax Payable"

    Default Rate is 2%
    Well, our company just concern with Withholding for Purchase. so that's the only subject of interest for now

2. Create a new Item Tax Types that make sure "airconditioning service charge" have this tax component.
    In fact it's the only tax component for this item

    It is a Service type item, so its :
    Sales Account is set to "Sales"
    COGS Account is set to "Repairs and Maintenance"

3. Create John as Suppliers and make sure he is also in Tax Group with Withholding Tax checked. Not that it matters a lot

    John's
    Account Payable Account is set to "Account Payable"
    Purchase Account is set to "Repairs and Maintenance"

4. Create a direct Supplier Invoice for a $100 worth of invoice.

    The Price Before Tax Line is set to $100. Hence there's a $2 Withhold Tax on this transaction

The created Journal Entry would be ( from creating Supplier Invoice operation in FA )

Dr Withholding Tax Payable $2       ---> I would expect this to be Cr, like what you thought it would have been
Dr Repairs and Maintenance $100
Cr John Payable $102

We are also suffering due to lack of provision for witholding Taxes in FA.
Manual Entry (Journal or Quick) has no use!. We need to report and pay the collected amount from the supplier to government.
We need Supplier name, Pan Card No. and other mandate information as well. If you are doing manual entry, how will you prepare these reports by having only ledger entry?
It is Mandatory Requirement for most of Asian Governments to pay the Tax Collected from the supplier by way of Withholding Tax.
TDS (Tax Deducted at Source) filling is also separate mandatory report like Tax Report of GST.
Hope, We have implemented another set of Tax set up to implement the withholding Taxes in FA.
This is also most wanted features for FA users.
Does anyone have any solutions for this issue?

Hi, it is difficult to satisfy every aspect of tax handling. I think FA has a very good way of handling the taxes.
Maybe someone in the audience has a solution. Otherwise someone may write an extension.

Joe