How do I enter or handle withholding VAT in manager system?
Example, I invoice a customer 1,000, a vat is charge at 17.5% on it.
Giving a total of 1,175,
5% of the vat component is withheld by the customer and remitted to the revenue authority.
1000 x 17.5% = 175
175 x 5% = 8.75
Now the 8.75 is a vat withheld receivable, how do I record it in manager?
NOTE: Normal withholding was charge as well. Making it two types of taxes charge. And normal withholding am okay with the entry.
Do you have the localization for Ghana installed (by selecting Ghana under business details)?
Yes Ghana has been selected
What should be done next?
Wait for @Abeiku to respond. He is a moderator in Ghana and closely involved with your localization.
Manager Currently does not have a feature for withholding VAT. WHV is not common so you have to improvise. In Ghana, only Large corporate organisations and some large public sector organisations are given the right to withhold VAT.
Take note that WHV does not reduce VAT-inclusive sales. So create an Asset account for recording WHV. Introduce a line and enter negative numbers for this account to record WHV.
You can use a journal entry to credit the WHV account and debit the VAT liability account to realise the WHV or simply enter a negative number for the WHV asset account on a separate line when making VAT returns payment to GRA to zero out the WHV receivable account (to reduce your tax paid).
I hope this example is enough.
Read the following topic:
Add support for opening and closing balances - ideas - Manager Forum