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A
alirehman
January 30, 2022
Question

WITHHOLDING TAX DEDUCTION AT SOURCE

  • January 30, 2022
  • 1 reply
  • 0 views

Dear all,

 

This is Ali from Pakistan. My question is relating to payment to supplier. Here in Pakistan while making payment to supplier we need to deduct tax at source and pay to tax authorities on behalf of supplier.

 

I am unable to see any such feature in QBO which allows me to do so. 

 

There are several workarounds suggested by the community in which the most popular one is create a liability account in chart of accounts and use it for deduction while posting the bill but this raises a new problem it reduces the total supplier due amount by the amount for which we are suppose to pay withholding tax. technically supplier liability should be settled by the full amount . below i will try to explain with the help of an example

 

1. Purchased goods from supplier.

 

Accounting entry:

Inventory Dr PKR 100,000

Supplier  Cr PKR 100,000

 

2. Payment to supplier (tax to be withheld @ 4%)

Supplier Dr PKR 100,000

Tax liab Cr PKR 4,000

Bank  Cr 96,000

 

by opting the workaround in QBO vendor liability stands at 96,000 which is not correct.

 

is there anyway we can ask quickbooks to give the withholding tax feature as its a very common scenario in pakistan and many clients will require this.

 

Looking forward for the suggestions

1 reply

S
SarahannC
January 31, 2022

Hello there, @alirehman.

 

When you create a bill, you can add an additional line with category "Withholding Tax Deduction" or anything you want to name it. This will serve as a liability account in the Chart of Accounts (COA). 

 

  1. Open the bill
  2. Add another line item. Then, put a negative amount there.
  3. Save.

 

Also, we can send your valuable feedback to our Product Development team. You'll need to sign in to your QuickBooks Online account to share with us your insights about the feature you want to include in the program. Here's how:

 

  1. Go to the Gear icon.
  2. Select Feedback under Profile.
  3. Enter your suggestion. Then, click Next.

 

We always want to hear your suggestions as we continue developing the product as best for your business. Feel free to comment below if you have other concerns with QuickBooks. Take care always.

A
alirehmanAuthor
January 31, 2022

Hi SarhannC,

 

thanks for responding but as I have already mentioned this method in my post earlier . the problem with this workaround is that it reduces the total amount due to supplier.

 

However thanks for sharing the way to forward suggestions to QB team.

 

Thanks

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