Setting Default Withholding Tax Codes

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Withholding tax is no longer being updated for new features and reports in accounts that do not have the SuiteTax feature.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.

When you have completed the steps to set up your withholding tax preferences, tax types, tax codes, and tax groups, you can associate default withholding tax codes with items, customers, and vendors, so that they are automatically selected in transactions. However, you can override them in transactions.

Warning:

When setting default tax codes on item, customer, and vendor records, bear in mind that if you inactivate a tax control account in the future, then any existing default tax codes associated with that tax control account will be invalidated. When this happens, remember to change the default tax codes on the affected item, customer, and vendor records to make sure invalid tax codes are not used in transactions. Alternatively, you can re-activate the tax control account. For more information, see Tax Control Accounts Overview.

Setting Default Withholding Tax Codes on Item Records

As a buyer, you can associate a default withholding tax code with an item. In a transaction, if the customer has a default withholding tax code, then NetSuite applies the customer's default withholding tax code. If the customer does not have a default withholding tax code, then NetSuite applies the item's default withholding tax code.

To set a default withholding tax code on an item record:

Go to Lists > Accounting >Items.
Click the Edit link of an item record, or click New to create an item.
Click the Accounting subtab.
In the WH Tax Code field, select the withholding tax code that should apply to this item by default on transactions.
Click Save.

Setting Default Withholding Tax Codes on Vendor Records

As a buyer, you can associate a default withholding tax code with a vendor. NetSuite applies the vendor's default withholding tax code on purchase orders and vendor bills.

To set a default withholding tax code on a vendor record:

Go to Lists > Relationships > Vendors.
Click the Edit link of the vendor record, or click New to create a vendor.
Click the Financial subtab.
In the WH Tax Code field, select the withholding tax code that you want to apply by default to purchase orders and bills created for this vendor.
Click Save.

Setting Default Withholding Tax Codes on Customer Records

As a seller, you can associate a default withholding tax code with a customer so that, when receiving payments on open invoices from a customer, the appropriate withholding tax code is already selected. If a customer does not have a default withholding tax code, NetSuite will apply the default withholding tax code of the item on the transaction.

To set a default withholding tax code on a customer record:

Go to Lists > Relationships > Customers.
Click the Edit link of the customer record, or click New to create a customer.
Click the Financial subtab.
In the WH Tax Code field, select the withholding tax code that you want to apply by default to invoices and cash sales created for this customer.
Click Save.