Problem: I need to reduce withholding tax (12%) from the payable invoice and accrue it to the Current Tax Payable.
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Solution: Some tax authorities require withholding tax
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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
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proceed in FirstBIT
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using the following way.
1) . Enter the Invoice Received with Out of Scope Taxation type:
In At the Expenses Tab tab, put the Amount Payable to the Vendor (do not include Withholding Tax). in
In the below example, the lines are splitter split because the deferral will be applied to the part of the invoice.
Select the corresponding GL accounts in GL GL accounts column: 
Invoice received will create The invoice received creates the following GL entries: 
2) . Go to Taxes>Master Data>VAT Taxes > Master Data > VAT Rates:
Create the new rate - VAT Rate for 12 %:
See also 8.1.2.1. Adding a VAT Rate
3) . Go to Taxes>Taxes Documents>Output Taxes > Taxes Documents > Output VAT Transactions:
Create a new one as Output VAT Transaction:
- Transaction Type
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- : Invoice
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- Adjustment Type
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- : Increase
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- Basis: select the previously entered Invoice Received
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In inventory At the Inventory and Services Tab tab, put the item, VAT amount Item and VAT Amount, and select the expense Expense GL Account that will be debited as a result of manual entry:
See also 8.2.1. Output VAT Transactions
Output VAT Transaction will create creates the following GL entries:
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