Withholding tax confusion

[eko]

Show the results of the following:

1. Create a new Test business
2. Enable the few tabs (only Suppliers and Purchase Invoices) inCustomize until your list looks like this screenshot:
   
   
3. In Settings create the Withholding tax account (forgot this in first post)
   
   
4. Create a House rent account as Expense Account - operations in Chart of Accounts
5. Create a Non-inventory item and for ease of experiment assing the House rent account to both sales and purchases as in screenshot below:
   
   
6. Create a Supplier in the Suppliers tab
7. Create a Purchase invoice as below:
   
   
8. The View screen will be:
   
   
9. The Journal View
   
   
10. The Summary screen
    
    
11. Summary screen Withholding tax payable
    
    

[eko]

@WildTZ

I went into ‘Settings’ and created a “non-inventory item” call “house rent” that assigns to the “house rent” expense account.

Sorry but that should be to the “When purchased” not “When sold” account in the Non-Inventory item setting. You are purchasing house rent which is the expense!

[Joe91]

It could be a problem with the Cloud version - it certainly works as expected on my Windows Desktop Version 25.2.8.2075

[eko]

I use Server Edition. I do not think there is a difference between Editions. To rule Manager error out I proposed to check with the most simple setup in a test business.

[Mabaega]

I’ve tried it on the cloud edition, As @eko did above, everything looks fine.

[anatawiranata]

It’s so strange. It’s like there is a transaction that always post $100 to the withholding tax payable in the debit side, but it also always related to the new purchase invoice created. Normally, withholding tax in the purchase invoice will always post to the credit side of the withholding tax payable, and debit side on the accounts payable.

Can you try this, do a batch update in the purchase invoice list, check the related purchase invoice or maybe you can check all the purchase invoices, copy it to the spreadsheet and see all of the columns. Check if the $100 is there somewhere in one of the column or not? I’m also curious about how this happened.

[Abeiku]

@WildTZ I kindly request you to establish a new business, replicate the transition transaction within it, and share the results. If the same issue persists in the new file, please share a copy of the new business with us.

[WildTZ]

@eko Thank you for the run-down.

Everything looks like expected (normal). So the goods news there is something f’ed on my end. The bad news, is that something is f’ed on my end

Summary:

Summary-Withholding tax payable

[WildTZ]

@Joe91

Presumably you are using the built-in Withholding tax accounts and not a customised account ?

That is a good question, how do I figure that out?

@Joe91

What happens if you change the amount from 1,111 to say 5,000?

This happens:

[ArboGast]

Hi @WildTZ
I have seen a very long trail of discussion that I couldn’t pass through everything.
I encountered the same problem.
Here is how I solved it.
When you check Withholding tax box, instead of selecting “rate”, select “Amount”. Then manually calculate Withholding tax amount before any deductions. Fill the amount on the Withholding tax.

I hope this will solve your issue.
Thanks.

[Joe91]

This looks like a bug to me

[Ealfardan]

@WildTZ

This happens:

This doesn’t look normal, I will place this in bugs, however, I don’t think that this should be the end of the discussion.

Does this behavior only occur for edited transactions and not newly created ones?

[Joe91]

Maybe if WildTZ posted his test business file, we could check it independently to see if it a bug just for his file

[Mabaega]

New purchases or purchases that are edited, WHT using Rate or WHT using Amount produce the correct value in my business data example.

Maybe @WildTZ should share the data with @lubos so that the cause can be traced.

[WildTZ]

Thank you for the suggestions. I tried that, doesn’t change anything.

Edit screen:

View screen:

Summary-Withholding tax payable

[ArboGast]

I am in Tanzania and I do similar accounts but never met something like what you are showing.

I would like to know the following, and I will try to show you.

What is amount excluding taxes (I want VAT exclusive amount)
And What is VAT rate applied? (though I know in TZ it is 18%)
What is your target invoice payable amount?

Let me know this and I will try to help

[anatawiranata]

@Joe91

Maybe if WildTZ posted his test business file, we could check it independently to see if it a bug just for his file

Yes, If it doesn’t matter @WildTZ you can post the business file here. You can duplicate the business and then edit and delete any sensitive information first.

[WildTZ]

We are a smallish business that is growing and with that trying to ensure we improve our procedures. The other day I went through some things with our bookkeeper and stressed the importance of verifying the liability accounts etc. When I looked into the withholding tax there were some things that didn’t make any sense to me.

Now I’m 99% sure this is due to us doing something incorrectly and with that perhaps uncovered a bug or some unintended behavior. Whatever the solution is, I’m sure it will be embarrassing, but hopefully I learn something

If I look into another supplier that we pay in Tanzanian Shillings, everything is normal (expense account: Cleaning supplies):

For this USD supplier again things are normal (expense account: Website):

For this landlord it gets funky. Everything was fine on the old transactions, but on some of the newer ones the Purchase invoices show up in “debit” as well.

When I’m looking through this some of the “debit” amount seems to be related to unpaid amounts. Is this normal?

For example on Purchase invoice number 24248, it was credited 1,111.11 USD to the Withholding tax payable account and also current date debited 240 USD which is 10% of the amount still due.

I feel like I’m sniffing the problem, but can’t put my finger on it. Something related to the due dates or payments.

This might get a little bit disconnected.

But if I go back to my example of purchase invoice 24390 (Test number 4), the summary looks like this:

Edit screen for purchase invoice 24390:

If I make a new payment:

Then the summary looks correct (I think):

I apologize if this is a bit confusing, I started of trying to answer @Ealfardan and as I kept going I thought I figured something out, then not, and now I’m just confused.

Not sure if this was helpful or if it explains something or not.

[Ealfardan]

Are you using Show balances on cash basis on your Summary Edit screen?

[WildTZ]

Yes…am I an idiot?

All is good now.

Thank you and everyone else who helped me along the way.