Withholding Tax

  • 4 January 2024
  • 5 replies

Hello All,

I have a case where I must record withholding tax and submit it to the government.

Ex: Bill from Vendor is 100$ (does not include any taxes), withholding tax is 15%.

As document F335 - Value Added Taxes. there are 2 ways to record withholding taxes.

Option 1: Enter directly to GL through Journal Transaction, the entry included:

  Debit Credit
Payable Account   100
Withholding Tax   15
Expense Account 115  


Disadvantage: The system doesn't calculate tax amount. The user needs to manually calculate and input it.

Option 2: Create Bill and apply Bill with Payment → Tax Amount will be automatically calculated and booked to GL after Payment is released.

Entries on Bill

  Debit Credit
Payable Account   100
Expense Account 100  

Entries on Payment

  Debit Credit
Bank Account   85
Withholding Tax   15
Payable Account 100



Because the system defaults to the withholding tax will be extracted tax amount from the Amount on the Bill, the amount that the system calculates I have to pay is only 85$. I have to pay the Vendor 100$ and pay the Government 15$ in total 115$. This is incorrect in my case so can't use this method.


Has anyone got an idea how to record it?

I expect the system can calculate the tax amount after the user types in the taxable amount and Tax ID and the entries will be as Option 1.

Thanks in advance for all your recommendations.

Yên Chi 



Best answer by Laura02 20 February 2024, 14:59

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5 replies

Badge +18


I recommend setting up a new exclusive Tax ID and a new Tax Zone and adding them to the vendor.  This example is from Acumatica Sales Demo, showing Canadian VAT taxes. Try the following steps in your testing tenant and when it works, repeat in your Live production tenant.

  1. The Calculation Rule should be EXCLUSIVE meaning the line amount of $100 does not already include the tax.  Ask your Tax Advisor about the other settings in this screen, or match them to your existing Inclusive VAT taxes that you demonstrated above.
Set up new Exclusive VAT tax ID
  1. Add new Tax ID to your Taxable Category/Categories.
Add new Tax ID to Taxable Categories
  1. Create a new Tax Zone.  Model the new Tax Zone like your existing tax zones, except subtract the Tax ID that is Inclusive and replace it with your new Exclusive Tax ID created in step 1.
New Tax Zone containing exclusive tax id
  1. Add the new Tax Zone to the vendor’s Purchase Settings tab and to multiple locations of the Vendor, if applicable.
Add Tax Zone to Vendor

The Tax will be “scooped up” and reported to the taxing authority with your  Inclusive VAT tax reports at the end of month.

Please let us know how these steps work out or if you have questions.



Hi @Laura02 , is it from the U100 data set?

Badge +18


The tax examples above are from the Sales Demo data set.



HI @Laura02 

I follow your guide in detail:

  1. Edit Taxes CAONHST - I removed Reporting Group Input because this is a withholding tax (only output)
  1. Add CAONHST to Taxable Tax Categories 
  1. Add Tax ID to Tax Zones


  1. Add Tax Zones to the Vendor


Then I create a Bill, make a Payment and Prepare Report Tax


I haven't seen any changes to the report tax.

My expectation is when the recording Bill is equal to 100$, the record Payment is equal to 115$ including 100$ Vendor and 15$ for tax payable. Final entries should be

  Debit Credit
Payable   100
Withholding Tax   15
Expense 115


Badge +18


It seems like the Tax Report was prepared for year 2014 while the taxable documents are in year 2024.




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