Posting Withheld Taxes

Legislation in a number of countries allows for tax to become payable on the receipt date, rather than the invoice date. A notional tax liability is calculated on the invoice and is posted to a notional tax account. When a receipt is recorded for the invoice, the notional tax amount is posted to the actual tax account, when it becomes due.

Post Withheld Taxes (PWT) allows you to identify transactions for a range of accounts. It selects the allocated invoices and receipts within the range, and moves the tax amount from the notional account to the actual account.

You can specify a range of gross accounts, and enter the notional or original tax suspense account code(s) used. This function allocates the credit value on the tax suspense account and posts an allocated balancing debit to the same account. This effectively cancels the original tax posting. A balancing credit is then generated and posted to the actual tax account specified on this form.

Sequencing can be applied to system generated transactions, including those generated by Post Withheld Taxes. See 'Introducing Ledger Sequence Numbering'.

Post Withheld Taxes does not perform the allocation of debit to credits. See 'What is Matching?'

Note: If you are using expenditure checking, you should note that transactions are posted by Post Withheld Taxes even if budgets are exceeded.
  1. Use Post Withheld Taxes to identify the gross, notional and actual tax accounts.
  2. Select Action > Post to generate and post the tax transactions.