Withholding tax postings

If 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:

1. 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.

2. 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 USt-Art 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.

• Auf Zahlungen

  The tax obligation arises at purchase invoice payment. When you pay the purchase invoice, LN automatically generates a standing order in Zahlungswesen to pay the tax to the collection office.