How to handle withholding tax
Hi,
The law in my jurisdiction requires that 6% withholding tax is charged for services
but our company is not authorized to collect withholding tax for the revenue authority
So what happens is that we invoice the customers for services without adding the tax amount and when they pay the invoice they deduct 6% for the withholding tax.
e.g services invoice = 1000 , 6%WHT = 60 , the customer pays 940
So in our receivables it reflects 60 as unpaid by the customer
What would be the best way to handle this situation so that we don’t have the 60 hanging in our receivables
Thanks in advance
r2-g
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