Witholding Tax Issue_Egypt

[former_member332580]

Hi Experts,

Our requirement is to have accounting entry as below during MIRO, company paying Withholding tax to customs for import materials which can be refundable after inspection.

Dr.. WHT-Debtors 100

Dr. GR/IR. 1000

Cr. Vendor. 1100

is it possible to have the above entry...in WHT configuration.

Regards,

KB

[sanilbhandari]

Hello bkishore

The accounting entry being proposed by you seem to be incorrect. The basic meaning of with holding tax is that the amount is retained from the invoice value and paid to the Tax Authority. In this case, what you are proposing is to pay to the vendor the with holding tax over and above the value of goods/services. This is more like tax on sales and purchase, no with holding tax.

You have mentioned that you will pay this to customs and it might be paid back after inspection. In such a case the accounting entry should be:

Dr.. WHT-Debtors 100

Dr. GR/IR. 1000

Cr. Vendor. 1000

Cr With Holding Tax Payable

You can easily configure this by updating the with holding tax code with posting indicator as "3" and than assigning the right GL in the company code area.

Hope this helps.

Thanks & Regards,

Sanil Bhandari

[former_member332580]

Thanks Sanil,

We have suggested the same, but business is expecting only one debit entry.

Regards,

KB

[Lakshmipathi]

When you post a query and give further updates, please add the content under "Comments" and not under "Answer" as you were not answering to a query but only providing additional informations as asked by the members. Also, when you add the text under Comments, it will be intimated to the person to whom you are responding whereas, if you add the text under Answer, the member will not be intimated. By the way, your above answer has been converted as comment by me.

[sanilbhandari]

Hello bkishore

You can change the posting indicator as 2 instead of 3

Thanks & Regards

Sanil Bhandari