A withholding tax also known as retention tax is an income tax to be paid to the government by the payer of the income (customer) rather than by the recipient of the income (supplier). Suppliers will receive less on the sales, and the variance shall be charged to expenses e.g. “Withheld tax by customer” (or reduce sales).
In TreezSoft accounting, there are 2 methods to allow our user to record the withholding tax payment
1. Enter by account
2. Enter by stock item
1. Enter Withholding Tax using Account:
Firstly, go to the company module and select Chart of Account. Click on the New Account to create a new COA under “Other Expenses” with the name of “Withholding Tax” and Save.
Secondly, user need to create a Sales Invoice as per normal and select Account in the Enter Invoice By. Click Add Line to has an extra line for “Withholding Tax” account and the amount for this line should be negative and Save.
Once received payment, user just need to create Receive Payment as per normal.
2. Enter Withholding Tax using Item:
Same as the first step on above, user need to create a new COA under “Other Expenses” named “Withholding Tax” and Save.
Besides that, user need to create a new Stock Group under Stock module for the withholding tax. For example, enter “Withholding Tax Group” as a Code and Withholding Tax as the name. Select “Withholding Tax” account as the Sales Account and Sales Return Account.
After create the New Stock Group successfully, user need to create a new Stock Item called “Withholding Tax” and select Stock Group “Withholding Tax Group”. Please untick the stock control to Save.
Next is to create a Sales Invoice as per normal and select Stock Item in the Enter Invoice By. Click Add Line to has an extra line for “Withholding Tax” item and the amount for this line should be negative and Save.
Once received payment, user just need to create Receive Payment as per normal.
TreezSoft is a cloud accounting software for Small and Medium-sized Enterprises (SMEs). It allows you to access your financial information anytime, anywhere. It also allows you to have unlimited users for FREE for your account in TreezSoft. Our aim is to help reduce our clients' time spent on accounting mainly by using our automated processes and integration to help increase their company effeciency at a minimum costs. SMEs can use TreezSoft to keep track their expenses, accounts, daily operation e.g. Point of Sales (namely QPOS) system and etc.
You can also visit the links below to read more on SST-related topics in TreezSoft:
TreezSoft is a cloud accounting software for Small and Medium-sized Enterprises (SMEs). It allows you to access your financial information anytime, anywhere. It also allows you to have unlimited users for FREE for your account in TreezSoft. Our aim is to help reduce our clients' time spent on accounting mainly by using our automated processes and integration to help increase their company efficiency at a minimum cost. SMEs can use TreezSoft to keep track of their expenses, accounts, daily operation e.g. Point of Sales (namely QPOS) system and etc.
Visit TreezSoft at http://www.treezsoft.com/ to sign up for a 30 days trial account with us!
You can also email us at [email protected] for more inquiries.