4. Sales withholdings
Sales withholdings work the same as withholdings on purchases for credit memos and sales invoices:
Withholdings will be calculated within credit memos and sales invoices if the customer has been set up with a perception key and if the account and/or product does not have the Tax PIT Exclude field marked.
Selecting a client that has a perception key configured an informational message will displayed at the top of the page informing about the perception key assigned to it. In addition, you can view all your posted withholdings by clicking Open withholdings entries.
When you release the invoice or credit memo, the following message is displayed to alert the user of the automatic calculation of PIT:
For the value of the invoice or credit memo totals to be recalculated correctly, you must refresh the page (F5) or exit and re-enter the document
The automatically inserted retention line contains the following information:
- Type: G/L Account
- Sales G/L account set up in the Collection Key associated to the customer
- Description: G/L Account name set up in Chart of Accounts
- Quantity: PIT percentage set up in the Collection Key associated to the customer, divided by -100
- Direct Unit Cost Excluded VAT: the sum of all the amounts in “Line Amount Excluded VAT” from all the document lines with no “Exluded from PIT” activated.
- Line Amount Excluded VAT: the result of multiplying Quantity per Direct Unit Cost Excluded VAT.
As in purchases, if the perception key associated with the customer has the check marked “Allow Zero Percentage” the line will be created in the same way, but with an amount of 0.
When posting the invoice or credit memo, an open withholding tax entry of type sales is generated:
New information appears on the retention line on the posted invoice or credit memo:
- Exclude from PIT: states if this line is considered or not on PIT calculation
- Withholding Line: define this line as retention line
- Withholding base amount: Amount on which the withholding tax rate will be applied
- PIT %: percentage to be applied on the base amount of withholding tax to obtain the withholding amount.
These default fields are not displayed on the unposted invoice/credit memo screens but can be added by the user.
A new field called PIT Amount is displayed on the statistics screen for posted and unregistered invoices/credits memo that is calculated by multiplying the withholding tax base by withholding tax %, divided by 100 and negative (because that is what should be paid to the Tax Agency).
On the Navigate option for invoices and credit memos, you can view the withholding entries that are generated with that document:
Clicking on the ledger numbers field we can access the withholding entries screen to display the withholding entries generated with this posted invoice/credit memo: