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WHT applied only on the regular reverse charge tax and not the offset tax

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edited Feb 19, 2021 3:05PM in Tax & Global 2 comments

Summary

WHT applied only on the regular reverse charge tax and not the offset tax

Content

Hi All,

We have an EU implementation of taxes and where we have reverse charge and offset taxes applied on an Payable invoices.

Lets say we have an invoice of 100 Euros. We apply a tax rate code (reverse charge tax) of 10 Euros and offset tax rate code of -10 Euros. The gross invoice amount is 100 still.

When we calculate WHT on this invoice, say about 5%, WHT is calculating 5% on (100 +10) but not (100 + 10 -10). It is not considering the WHT on Offset tax rate code.

In the tax setup, I see a check box of "use withholding tax" on reverse charge tax but not on the offset tax code. The option is not there. 

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