Introduction: Foreign Country Withholding Tax
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    Introduction: Foreign Country Withholding Tax

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    Article summary

    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





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