What Transactions are Generated for Withholding Tax?

The Withholding Tax Journal

The withholding tax amount is posted in the actuals ledger to the Tax Account identified on the Withholding Tax Types (WTT). The offset amount is posted to the source account of the transaction from which the tax value was calculated, or to the alternative Source Account if one is identified on the Withholding Tax Type.

The Journal Type is also identified on the Withholding Tax Type.

The transaction reference for the withholding tax posting is determined by the Transaction Reference Format on the Withholding Tax Type.

The journal description is taken from the Withholding Tax Type description. The journal source is WHTAX. The posting period is the current period as defined in Ledger Setup (LES) and the due date is the same as the source journal's source account code transaction date. The transaction date is the payment date you enter when you run Withholding Tax (WHT). If you are using calculate withholding tax at payment posting point, the transaction date is the payment date you entered in Payment Run (PYR). If you are using calculate withholding tax at invoice posting point, the transaction date is the last source taxable line's transaction date and the allocation marker is set from Withholding Tax Allocation Mkr in Ledger Setup (LES).

Which Analysis Dimensions are Required in the Generated Journal?

Analysis codes are automatically generated in the withholding tax journal, following the conventional ledger analysis rules that you set for the account and the journal type. As such, the inclusion or exclusion of specific analysis dimensions on the journal depends on the following factors:

• the posting account. Analysis dimensions must be defined as either Mandatory or Optional in the Transaction Analysis tab on the Chart of Accounts (COA) record for an account, in order to be entered by the withholding tax journal. If a particular dimension is defined as Mandatory in the account record, then a code must be entered, regardless of the journal type. If it is defined as Optional, then the journal type indicates whether or not a code is required for that dimension. If it is defined as Prohibited, then that analysis dimension is left blank on the generated journal.
• the journal type. As described above, if an analysis dimension is defined as Optional in the account record, and you require that dimension in the withholding tax generated transaction, then it must be enabled in Journal Type (JNT) on the Analysis tab, for the journal type used to post the generated transaction.

What Analysis Codes are Entered in the Generated Journal?

For each analysis dimension that is required by the account and journal type combination, the specific analysis code entered on the generated journal depends on the source transaction or transactions. As a general rule, the required analysis codes are copied from the source transaction onto the withholding tax generated transaction. However, in practice there are normally many source transactions for each generated transaction, and so the analysis codes are only copied from one of those source transactions. They are copied from the transaction with the highest base amount (regardless of credit / debit), and if more than one source transaction has that same amount, then the first of those transactions is used, as displayed in the Withholding Tax dialog.

Posting the Journal

The withholding tax journals are posted to the actuals ledger when you post an invoice or a payment.