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To perform automatic withholding, assign a withholding tax group to an invoice or invoice distribution. Accept the default withholding tax group from the supplier site or select another from a list of values. To withhold tax, Payables creates one Withholding Tax type invoice distribution per Withholding Tax type tax name per withholding tax group. For each invoice, Payables automatically updates the invoice amount and scheduled payments to reflect the withholding. For example, for a Standard type invoice with an amount of 100 and a withholding tax amount of 20, Payables creates Withholding Tax type invoice distributions that total -20. Payables reduces the original invoice amount to 80 and updates the scheduled payments.
Review withheld amounts online or submit standard reports.
You can also automatically create withholding tax invoices to remit withheld taxes to the appropriate tax authorities. When you define Withholding Tax type tax names, you assign a Tax Authority type supplier to the tax name. When Payables withholds tax from an invoice, it uses the Withholding Tax type invoice distributions on the original invoice to create the invoice for the tax authority. Payables creates an invoice number for the withholding tax by appending the original invoice_id to 'Withholding Tax' (i.e. Withholding Tax - 10239).
Attention: Automatic Withholding Tax cannot be used if Automatic Offsets is enabled in Payables.
Attention: You cannot withhold taxes on prepayments.
This discussion includes the following topics:
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