- 2 Minutes to read
Introduction: Foreign Country Withholding Tax
- 2 Minutes to read
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.
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.
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
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.
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
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
How to process a Client Invoice
There is a Withholding WHT activity report
Navigate to > Reports > Tax reports
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