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How to enter withholding tax on invoice without reducing transaction amount?

Summary:

How to enter withholding tax on invoice without reducing transaction amount?

Content (please ensure you mask any confidential information):

We want to enter withholding taxes in the invoice and have tried the following workarounds:

  • Enter a negative invoice line
  • Use a negative tax rate

However, both workarounds reduce the transaction amount by the amount of withholding tax. These are the entries we want to achieve:

  1. Upon billing, the withholding tax will be recorded as "AR - Withholding Tax" since this is still a receivable from the customer at this point
    Dr. AR - Trade
    Dr. AR - Withholding Tax

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