Setting Up Withholding Tax Types

Important:

This topic pertains to withholding tax in NetSuite accounts that do not have the SuiteTax feature enabled. If you are using a NetSuite account where the SuiteTax feature is enabled, go to Withholding Taxes in SuiteTax.

Withholding tax is no longer being updated for new features and reports in accounts that do not have the SuiteTax feature. All version upgrades of the Withholding Tax SuiteApp include fixes for reported issues only.

A withholding tax type determines where withholding tax is tracked in the chart of accounts. You must specify the tax control accounts to which NetSuite should post the collection or payment of tax. You must also specify the tax type's tax base. The tax base determines whether withholding tax should be applied to the line item net amount, or the line item gross amount, or the line item tax amount (VAT).

To create a withholding tax type for a nexus:

1. Go to Setup > Withholding Tax > Tax Types.

2. Click New.

3. Provide values for the following fields:

   1. Name – Enter a name for this withholding tax type.

   2. Description – Enter a description for this withholding tax type.

   3. Nexus – Select the nexus that this withholding tax type applies to.

   4. Withholding Tax Base – Select the tax base. Specify whether the withholding tax applies to the line item net amount, line item gross amount, or line item tax amount (VAT/GST or sales tax).

      Warning:

      The Pay Tax Liability functionality in NetSuite cannot pick up withholding tax amounts posted to an account that is not a tax control account. The Tax Account field on the Tax Liability Check (Transactions > Bank > Write Tax Liability) only shows tax control accounts that have been created from Setup > Accounting > Tax Control Accounts. For more information, see Creating a Tax Control Account.

   5. Liability/Purchase Tax Account : Select the account to which NetSuite posts tax withheld on purchase transactions.

   6. Asset/Sales Tax Account : Select the account to which NetSuite posts tax withheld on sales transactions.

4. Click Save. The next step is to set up withholding tax codes. See Setting Up Withholding Tax Codes.

Related Topics

• Withholding Tax Overview
• Setting Up Withholding Tax
• Setting Up Withholding Tax Preferences
• Setting Up Withholding Tax Codes
• Setting Up Withholding Tax Groups
• Setting Default Withholding Tax Codes
• Creating or Customizing Roles to Use Withholding Tax Features
• Applying Withholding Taxes on Transactions as a Buyer
• Recording Withholding Taxes on Transactions as a Seller
• Importing Withholding Tax Transactions
• Withholding Tax Reporting
• Withholding Tax Troubleshooting Guide
• Known Limitations of the Withholding Tax SuiteApp

General Notices