Skip to main content

How do I deduct withholding tax when paying a vendor?

Add the withholding tax codes to the vendor and tick Default. Every payment to that vendor fills the Withholdings grid at the rate valid on the posting date and pays the vendor the net.

Screen
Release Vendor In Legal Entity, then Payment
Who
The tax accountant, the cashier
Takes effect
On the next payment created
Needs first
Withholding tax codes with rates and accounts on Withholding Tax

Before you start​

  • The withholding codes exist with a rate for the dates and an account in the default posting profile.

Steps​

  1. Open Release Vendor In Legal Entity, tab Payment, add the codes and tick Default. Save.
  2. Create a Payment to the vendor. The Withholdings grid fills.
  3. Tick Withholding Manual on a line to type the amount yourself (for example a reduced-rate certificate).
  4. Pay the net in Payment Through and save.

Check it worked​

  • Withholding Tax Amount on the payment; the tax account carries it until paid over.

If something looks wrong​

  • Nothing fills. No code ticked Default on the vendor (or the alternative payee), or no rate for the posting date. The vendor's Calculate Withholding Tax tick does nothing.