[GNC] Help adding withholding tax and VAT in seperate fileds of the invoice.
Nikos Parafestas
antidoto at posteo.net
Wed Jan 27 11:29:15 EST 2021
Thank you Derek for your answer.
In my case I am not accountable whether or not my client pays the 20%
Withholding Tax but it is obligatory to be written in the invoice as a
seperate line. It would be nice for me to have a report every year for
this amount but it is optional.
On the other hand I need to keep track of the 24% VAT, because I have
to deposit the VAT I recieve to the goverment every 3 months.
On Wed, 2021-01-27 at 09:17 -0500, Derek Atkins wrote:
> Hi,
>
> On Wed, January 27, 2021 8:49 am, Nikos Parafestas wrote:
> > Beacuse of the taxation sytem in my country I need to add
> > withholding
> > tax and VAT in seperate fields in the invoice. This applies to
> > every
> > tansaction with a net price of 300 euro or more.
>
> The first thing to note is that GnuCash only allows you to apply a
> single
> Tax Table per invoice line-item, but each line item can have its own
> unique tax-table. You can (I believe) supply a "default tax table"
> which
> gets applied. There is no way to set a floor, meaning that you will
> need
> to manually determine if/when the tax(es) apply.
>
> > For example if the Net Price is 1000 euro the invoice should
> > include
> > the following:
> > ---
> > 1. Net Price = 1000 euro
> > 2. VAT = 240 euro
> > 3. Total Price 1240 euro
> > 4. Withholding Tax (which is 20% of the Net Price. This amount the
> > client pays directly to the goverment not to me) = 200 euro
> > 5. Payable (Total - Witholding Tax) = 1040 euro
> > ----
> >
> > 1-3 : I have managed to add them correctly
> > 4 & 5: I don't have a clue how to add them.
>
> The best way to think about your particular case is with some
> algebra, and
> you'll need to help me a bit to fill that in.
>
> GnuCash has two ways to compute taxes: either they are included in
> the
> price, or they are added to the price.
>
> If tax is included, then the line-item price is what the user pays,
> and
> the tax is computed in such a way that value+tax = price. In other
> words,
> if the price is $100 and 5% tax is included, then the customer pays
> you
> $100, of which $4.76 is tax (because 5% of $95.24 is 4.76, and 95.24
> +
> 4.76 == 100).
>
> If the tax is added on, then the line-item price is the basis for the
> tax,
> and the user pays the price+tax total. In other words, if the price
> is
> $100 and there is 5% tax, the user pays $105.
>
> Now, back to the GnuCash tax tables. You can include multiple taxes
> in a
> tax table, but the two are independent. So let's say you have a 5%
> state
> tax and a 2% city tax, where the user pays a total of 7%. This is
> easy,
> you have two entries in the tax table, one for 5% and one for 2%.
>
> However, there are places (e.g. Canada), where one tax includes the
> other.
> For example, you might have a 10% GST and a 7% PST, where the PST
> *includes* the GST. In this case, you would put the 10% GST in one
> tax
> table line, but for PST you cannot say 7%, because the 7% includes
> the
> 10%. This is where the algebra comes in. To compute the PST, you're
> want
> to compute x% where:
>
> x% of price = 7% of (price + 10% of price)
> x * price = .07 * (1 + 0.1) price
> x = .07 * (1 + 0.1)
> = .077
> = 7.7%
>
> So you would enter GST of 10% and PST of 7.7% to get the correct
> taxes
> computed.
>
> Now, back to YOUR case. It sounds like you have:
> price = 1000
> VAT = 24% of the price
> Withholding = is 20% of price
> Invoice amount is price + VAT - Withholding
>
> So really, the invoice amount is price + 4%.
>
> It sounds like you need to actually show VAT and Withholding amounts
> on
> the invoice. Do you need to actually RECORD the VAT + Withholding
> amounts, or just display them on the invoice? What if the customer
> does
> not actually pay the withholding to the government? Are you still on
> the
> hook for it?
>
> I am asking because the answer to these questions will tell us if we
> need
> to handle it within the tax table system, or by the invoice report.
>
> If you are only on the hook for 4%, regardless of whether they pay or
> not,
> then you should probably just record the 4% and update the invoice to
> report the 24% and 20% values. However if you need to actually
> record
> that, we might have a SMALL problem, because I am not sure that
> GnuCash
> supports a "negative" rate, which is what you would need for the
> withholding.
>
> > I hope I made it clear.
>
> Ditto..
>
> > ps. If you want to help I would like to ask you to provide your
> > answers
> > in a way that a novice user like me can understand.
>
> I hope what I've written above helps you -- but you'll still need to
> fill
> in the blanks.
>
> > Please remember to CC this list on all your replies.
> > You can do this by using Reply-To-List or Reply-All.
>
> -derek
>
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