| | Withholding tax postingsIf you process a purchase invoice to which withholding tax
applies, LN creates a
sequence of postings for the various withheld income tax and social
contribution amounts. If you complete a tax declaration, LN creates the
following financial postings: Submit the tax declaration If you submit the tax declaration, LN creates contra
postings of the tax amounts on the ledger accounts linked to the tax codes, and
posts the total payable amount to the interim account for payable tax. Make the payments If you process the standing order, LN creates a contra
posting of the paid amount on the interim account for payable tax. If you use a
different method to pay the tax or if you delete the standing order, you must
create a journal entry to clear the tax interim account.
The Tax Type of the group tax code indicates the moment at which the tax
obligation arises. For withholding tax and social contributions, the tax type can
be: Normal The tax obligation arises at purchase invoice registration.
Payment is periodically when you pay the tax declaration. On Payments The tax obligation arises at purchase invoice payment. When
you pay the purchase invoice, LN automatically generates a standing order in Cash Management to pay
the tax to the collection office.
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