Dear Friends,
Can you help me understand the concept of Withholding Tax through Journal Entries?
Let us assume that i have a supplier invoice of 1000 with a requirement to withhold tax of 2%, can someone explain the whole cycle to me?
Regards,
Sudhir
Required: Journal Entries for Withholding Tax (AP)
Hi Sudhir
When you enter the invoice for the supplier (1000), this amount will not paid fully to supplier because the supplier link to withholding tax.
So if the supplier has WHT 2%, this means the payment for this supplier will not 1000 but it will be 980 only & the 20 will paid to the tax authority.
This issue happen when you make agreement with supplier to inform the tax authority with all supplier statement with you & to provide them with the all amounts instead of the supplier.
Hope I can help you
Thanks
Hisham
When you enter the invoice for the supplier (1000), this amount will not paid fully to supplier because the supplier link to withholding tax.
So if the supplier has WHT 2%, this means the payment for this supplier will not 1000 but it will be 980 only & the 20 will paid to the tax authority.
This issue happen when you make agreement with supplier to inform the tax authority with all supplier statement with you & to provide them with the all amounts instead of the supplier.
Hope I can help you
Thanks
Hisham
-
smishra0oracle
- Posts: 5
- Joined: Thu Dec 04, 2008 10:09 am
- Location: India
Hi Sudhir,
Hiszaki is saying whatever is always right but in Oracle financials two type of withhold taxes.
1:Whenever you made payment to foreign entity that time will be occurred as withhold tax its apply different rates as per context of entity in India. For this, we need to setup Payable options and a special calendar withholding tax calendar.
2: I guess that you are an Indian. Do you ever see the TDS(Tax Deduct at Source(Income Tax))? Let's check the Accounting entry which way generated in IN60107. TDS invoice is best example of withholding tax invoice.
<b><u>On matching the Payable invoices with PO</u></b>
AP Accrual A/c debit=Sum of tax amount of respective tax+ line amount.
vendor A/c credit = Sum of tax amount of respective tax+ line amount.
<u><b>On creation of credit Memo at the time of |Approving the created regular invoice for TDS Deduction</b></u>
Vendor A/c debit=amount debited towards TDS
TDS A/c credit = amount debited towards TDS
<u><b>On creation of TDS invoice at the time of approving the created regular invoice for TDS deduction</b></u> <font color="yellow"><i><u><b>Withhold tax invoice</b></u></i></font id="yellow">
TDS A/c debit = Amount debited towards TDS
TDS Tax Vendor A/c credit = Amount debited towards TDS
Hope I can help you
Thanking you and with warm regrds
Hiszaki is saying whatever is always right but in Oracle financials two type of withhold taxes.
1:Whenever you made payment to foreign entity that time will be occurred as withhold tax its apply different rates as per context of entity in India. For this, we need to setup Payable options and a special calendar withholding tax calendar.
2: I guess that you are an Indian. Do you ever see the TDS(Tax Deduct at Source(Income Tax))? Let's check the Accounting entry which way generated in IN60107. TDS invoice is best example of withholding tax invoice.
<b><u>On matching the Payable invoices with PO</u></b>
AP Accrual A/c debit=Sum of tax amount of respective tax+ line amount.
vendor A/c credit = Sum of tax amount of respective tax+ line amount.
<u><b>On creation of credit Memo at the time of |Approving the created regular invoice for TDS Deduction</b></u>
Vendor A/c debit=amount debited towards TDS
TDS A/c credit = amount debited towards TDS
<u><b>On creation of TDS invoice at the time of approving the created regular invoice for TDS deduction</b></u> <font color="yellow"><i><u><b>Withhold tax invoice</b></u></i></font id="yellow">
TDS A/c debit = Amount debited towards TDS
TDS Tax Vendor A/c credit = Amount debited towards TDS
Hope I can help you
Thanking you and with warm regrds
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