I have this issue where the withholding tax on Sales invoice is calculated on the Total Invoice instead of the subtotal, thus the deduction also affects the VAT. Any advice on how to fix this, if not what’s the best way to setup Withholding tax Manager for Sales Invoice and have it corrected posted in the various chart accounts. Thanks
No, it does not. Tax is calculated only on the amount of the line item to which it is applied.
It is true that withholding tax is calculated on the total amount of the sales invoice, including tax, but that is different than what you wrote. That is the way it works in most jurisdictions that use withholding tax. If withholding tax is not calculated on the total in your jurisdiction, see the second Notes box in this Guide: https://www.manager.io/guides/12346.
Thanks