Hi there,
I had to open a new topic for the same issue stated (and closed) at this forum here: Problem when applying the irpf
In some countries, like Spain, there is a withholding tax called IRPF. It should be applied to the price base of every sales invoice.
Manager does apply the withholding tax to the taxed total. Can we ask for an option in the withholding tax to select if we want the withhoiding tax to apply before or after the other taxations?
I doubt anyone can use the amazing Manager in Spain or any other country with that important requiremet. I would love to stay with the wonderful work devs are doing here. Hope you can look at this and tell me if this would be posible.
I’ve tried to use an alternative: creating a multi-component custom tax code. With a first component for the VAT (21%) and with a second component for the withholding tax IRPF in negative number (-15%)
It seems to calculate correctly both taxes. And show them separately in the invoice (great!)
But strangely the subtotal calculated is incorrect. And I don’t get why
Example: create sales invoice for a service of 1300€. Apply to it the multi-component (+21%, -15%)
Then the invoice created by manager shows the correct VAT (273), the correct withholding negative tax (-195) but it applies to a subtotal of 1495 that should be just 1300
IRPF retention is applied from every freelancer in his or her sale invoices to other profesional or enterprise.
Then the other profesional or enterprise that has received the invoice must pay that withholding to the tax collector in behalf that initical profesional.
I don’t know if I had explained in a compehensive way
You can use the Withholding Tax (WT) check box present on the invoice edit screen. But as the WT in Manager is calculated on the total incl. tax, i.s.o. 15% you need to insert 15/121 = 12,3967 as the percentage.
You can also change the standard account Impuesto retenido a cobrar to H.P. Retenciones y pagos a cuenta.
@lubos it would be nice to be able to change the name of the Withholding Tax (in this case to IRPF).
The numbers work with that trick. It’s not clean nor ideal, but it works for now.
Hope @lubos can do his magic and give us, al least, the option to change the name amb the Withholding Tax. But I stand with the opinion that would be great to have the option to select if you want to calculate the withholding tax BEFORE OR AFTER the other taxes apply. Doesn’t seem complicated to add and would do wonders for this issue.
Thanks for listening. And congrats for this nice and clean app!
I raised this issue in the past. I believe the computation of withholding tax on the After Tax amount is incorrect and perplexing given that withholding tax is an advance payment of income tax (only). I’m not sure any taxing authority will require taxpayers to calculate withholding tax (income tax deducted at source) on the after-tax amounts. That would withhold tax on sums that include both direct taxes and indirect taxes (Income tax and Sales tax)
@lubos Even if the rate is changed in the future to use before-tax amounts, the ability to enter amounts in the withholding tax field should still be available because different line items may have different WHT tax rates (true story in my country), some line items may be exempted from withholding tax.
One more thing: the withholding tax is showed in the Reports section?
I can’t find which report should I select to prompt me the accumulation of the withholding tax (IRPF in this case)
