Withholding tax is calculated and executed at the vendor payment process. The calculated reflection of the withholding tax on the finance module will be as follows:
- Price includes sales tax: For a 1% withholding tax, 10% sales tax, and a 1,000 USD price including tax, 909.09 USD excludes tax, and this amount is the base of the withholding tax (909.09 * 1%). The system will allocate 9.09 USD to the withholding tax payable account, and 990.91 USD will be allocated to the payable account. The following diagram shows the calculation:
- Price excludes sales tax: For a 1% withholding tax, 10% sales tax, and a 1,000 USD price excluding sales tax, this will be the base of the withholding tax calculation (1,000 * 1%), and the amount including sales tax is 1,100 USD. The system will allocate $10 to the withholding tax payable account and 990 USD will be allocated...
