What happens if you select Allow invoice amount withholding option in the withholding tax setup with the Calculation Point set to Invoice or Payment?

There's no impact of Allow invoice amount withholding option on the withholding tax setup when the Calculation Point is set to Invoice.

When the Allow invoice amount withholding option is selected, and the Calculation Point is set to Payment, the withholding tax is calculated on the total invoice amount instead of the amount being paid.

For example:

If the withholding tax rate is 10% and the Invoice Amount = 1000, the withholding tax calculated would be 100.

• If the Calculation Point = Invoice.

  The withholding tax calculated on the invoice would be 100, and when this invoice is paid, there will be no re-calculation of withholding tax.

• If the Calculation Point = Payment and a partial payment of 600 is done.

  The withholding tax calculated at payment will still be 100 instead of 60 because the invoice amount is always considered for calculating withholding tax. Bear in mind that less than 100 amount payment is not allowed and will result in an error.