Introduction: Foreign Country Withholding Tax

Introduction: Foreign Country Withholding Tax (FCWT)

JobBag can now be configured to deduct foreign country withholding tax (FCWT) amounts on both client and supplier invoices. 

JobBag has already been configured for withholding tax in the following countries Indonesia, Philippines, Thailand and PNG.

Example: 

In some countries withholding is in place to collect income tax in relation to certain income types.

You provide services for $100,000. You raise the invoice to your client. 100% of the invoice is coded to income and then 15% (this rate may vary) is deducted and posted to a foreign country withholding tax GL account. 

You are provided services values at $100,000. You receive a supplier invoice to process. 100% of the supplier invoice is coded to the job/expense account and then 15% (this rate may vary) is deducted and posted to a foreign country withholding tax GL account.

The withholding amounts are then later paid to the relevant tax office or claimed as a deduction in your next tax return.

This is in addition to the GST (VAT or Sales Tax) and in some cases GST may not apply.

Getting started

The following steps will need to be taken to prepare your database

Set up the foreign country tax directorate/office as a supplier in the address book

Navigate to JobBag > Address book

Click here to learn how to create a new supplier in JobBag

Configure foreign country withholding rates in JobBag

Withholding rates should be configured in the country of origin

Navigate to File > Configuration > Countries to access the screen to enter tax rates, etc.

Click here to learn how to configure foreign country withholding

Create new General Ledger (GL) accounts and map as control accounts

Two new accounts should be created one for clients and another for suppliers

Navigate to Ledger > Chart of accounts

Click here to learn how to create a new General Ledger account

Configure your kinds

You need need to indicate which kinds will have withholding tax apply to the the client invoices

Navigate to JobBag > Kinds > edit kind

Tick the box "Apply WHT on client invoices

Configure withholding rates on suppliers address book record

In some countries there are different withholding rates for various supplied services

These different rates can be applied to the supplier record 

Navigate to JobBag > Address Book

Click here to learn how to apply withholding rates to your suppliers

How to process a Client Invoice

How to process Foreign Supplier Invoices where Withholding Tax is liable

Reporting

There is a Withholding WHT activity report

Navigate to > Reports > Tax reports

Click here to learn more about the WHT Activity Report

Need more Help?

Please contact support, 02 8115 8090 or email support@jobbag.com