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WHT with held by Customer

Former Member
0 Kudos

Hi Experts,

We have a scenario that customer withheld WHT when they do the payment. I wanted to reduce the while invoice creation. i have done the configuration(Extended WHT). but WHT is not calculated and not posted. Pl. assist me me to get the intended result.

I have followed below steps.

1 - Create WHT type - S2

2 - Create WHT Code - S2/Q1

3- Assigned WHT type for company

4 - Activate WHT in company

5 - Determined account posting

Following snap shot will explain the configuration in detail.

Accepted Solutions (0)

Answers (1)

Answers (1)

Former Member
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Hi Experts,

Let me elaborate further on the issue.

As per law here on sales,customer reduces WHT on the baseof output tax amount when they make the payment to my Client. So my Client want to reduce unnecessary reconciliation & work load involved by applying WHT on output tax amount when invoice(during billing) is created. i.e. They want WHT to be deducted on Output Tax which customer deduct during payment.


The Entries will be as follows.

If Output Tax Percentage  is 20% and TAX with held by customer on out put tax is 10% then the accounting entries will be as follows

Customer  "X"    Dr                    1180

Tax withheld by Customer Dr        20

Sales  Cr                                    1000

Output Tax  CR                            200

Configuration i did in order to get the result above.

I hope now anyone can undertand my query.

Appreciate your assist to in this regards.

Regards,

Aziz

former_member198650
Active Contributor
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Hi Aziz,

1. Assign GL accounts for the w.h.tax code & tax type in OBWW for the transaction WIT not for OFF.

2. At the time of assignment of tax codes in the customer master, select the W/Tax check box.

Regards,

Mukthar

Former Member
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Hi Mukthar,

Thank you for your feedback. Anyway I do not understand why I should maintain accounts in WIT because this is not a WHT to be paid over but will be off set with payable VAT as per the scenario.

Pl. elaborate.

So i think OFF is the correct Transaction.

However i did tested a scenario with WIT but still there's no any improvement.

Regards,

Aziz

former_member198650
Active Contributor
0 Kudos

Hi Aziz,

If you want to use the transaction OFF then you have to select the posting indicator as 3 in the with holding tax code configuration. However in withholding tax code configuration you have maintained the indicator as 1, due to this I advised to use the transaction WIT.

Regards,

Mukthar

Former Member
0 Kudos

Thanks Ali i was with a different understanding.

I'll check and confirm.

Regards.

Aziz