Problem: I need to reduce withholding tax (12%) from payable invoice and accrue it to Current Tax Payable
Solution: Some tax authorities require withholding tax to increase tax law compliance and secure earlier receipt of tax revenues. In simple terms, customers are required to withhold a portion of the balance due on sales invoices they receive from suppliers and pay that portion directly to the tax authority instead of to their suppliers. It can be proceed in FirstBIT by the following way.
1) Enter Invoice Received with Out of Scope Taxation type
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In inventory and Services Tab put the item, VAT amount and select the expense GL Account that will be debited as result of manual entry:
Output VAT Transaction will create following GL entries:
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