Withholding Tax : What and How does it work?
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Withholding Tax : What and How does it work?

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Overview

In some Asian countries businesses are required to withhold taxes (WHT) on supplier invoices and client invoices. This is in addition to the GST (VAT or Sales Tax).

WHT is set up on the Main Country - that is where you have a relationship with the relevant Tax Authority. You define the WHT type and associated rate for supplier invoices and client invoices.

Note: WHT can be calculated on invoices from overseas suppliers where required, the type and rate must be set for the supplier for this to be calculated on their invoices.

WHT is posted to separate Control Accounts for Supplier Invoices and Client Invoices that will appear in the Balance Sheet. The WHT Control Account for Supplier invoices is a Current Liability, the WHT Control Account for Client Invoices is a Current Asset.


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