@lubos, this discussion, Withholding Tax Account Credit, points out a shortcoming in the program. There is currently no way to handle withholding tax on starting balance sales invoices (those entered before the start date to establish Accounts receivable balances). The tax withheld on such invoices is not posted anywhere. When documentation arrives attesting to the customer’s remittance of the withheld tax to the authority, there is no clean way to handle the situation.
As I see it, the problem comes down to being able to set starting balances for Withholding tax receivable and Withholding tax asset accounts in some way. I see two possibilities:
- Set starting balances directly for the withholding tax asset accounts, but that would require a way to make them accessible before entering any sales invoices with the withholding tax option checked. (They currently become accessible only when a sales invoice with the option is created, but that means you could not transfer your old balance sheet figures to Manager until after you began entering invoices, and it would require going back and forth between entering starting balance invoices and setting up the chart of accounts.)
- Have pre-start-date sales invoices post withholding tax to Withholding tax receivable. (No other form of tax is posted anywhere for these invoices, but you can set a starting balance on an ordinary tax liability account.)
Option 1 seems most consistent with the rest of the program.