Setting Up Withholding Tax - Philippines
To enable withholding tax features, you must install the Withholding Tax SuiteApp under Customization > SuiteBundler > Search & Install Bundles.
You must be logged in with the Administrator role to install this bundle. If you have custom non-administrator roles in your account that should have access to the features in this bundle, you must manually add the necessary permissions to those custom roles. For information, see Creating or Customizing Roles to Use Withholding Tax Features.
Make sure your Philippines subsidiaries already exist in NetSuite. When the Withholding Tax SuiteApp detects a Philippines subsidiary, the expanded withholding tax codes for the Philippines are automatically created. For Withholding Tax SuiteApp setup and installation procedures, see Setting Up Withholding Tax.
Withholding Tax Preferences for the Philippines
In determining the timing for posting withholding tax in the Philippines, the general rule is that the obligation to deduct and withhold tax arises at the time an income payment is paid or is payable, or at the time the income payment is accrued or is recorded as an expense or asset, whichever comes first.
The following default settings are provided for the Philippines:
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Tax Point for sales transactions is set to On Payment – For sales transactions, you should record creditable withholding tax only when the customer has paid you and has issued you a creditable withholding tax certificate along with the payment. The certificate provides evidence that the customer has withheld the appropriate income tax due on the payment.
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Tax Point for purchase transactions is set to On Accrual – For purchases, you should record creditable withholding tax at the time an income payment to a vendor is paid or is payable, or the income payment to a vendor is accrued or recorded as an expense or asset, whichever is applicable, in the payor's books, whichever comes first. Generally, when the vendor bills you first before you pay, you should already recognize a withholding tax liability by then.
For more information, read the following topics:
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Setting Up Withholding Tax – for installation instructions
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Creating or Customizing Roles to Use Withholding Tax Features– for roles and permissions information
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Setting Up Withholding Tax Preferences – for general information about setting up withholding tax rules
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Setting Default Withholding Tax Codes – for information about setting default withholding tax codes on item, customer, and vendor records