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k b

Witholding Tax Issue_Egypt

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

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1 Answer

  • Posted on Jul 28, 2020 at 03:46 AM

    Hello k b

    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

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