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Integration with Revenue Services - Witholding Taxes

The functionality allows to charge certain operations with whithholding and pension taxes. Appropriate set up was created for witholding and pension tax percent, and accounts indication for automatic calculation of WHT/PF Amounts and posting WHT entries. The functionality applies to Purchases, Business Trips and Item Shipments for item write-offs in specific cases.

WHT Setup​

Select the following setup for WHT postings in WHT Setup:

  1. WHT Journal template,
  2. WHT Journal batch,
  3. WHT Method: accrual,
  4. VAT Product Posting Group for VAT over WHT - Full VAT.

“Price including VAT” is automatically unselected if WHT Business posting group is filled in. The system does not allow to have both WHT Business Posting Group and Prices Including VAT fields selected.

WHT Posting Groups Setup​

  1. WHT Product Posting Groups should be defined, with indication of the Code and Description.

  2. WHT Business Posting Groups should be created, with indication of the Code, Description and Residency. Non-Resident should be marked only when the Vendor is a not Resident.

  3. Set up WHT Posting Setup, per WHT Business Posting Groups and WHT Product Posting Group combination:

    • Define WHT%,
    • Accrued WHT G/L account and Payable WHT G/L account,
    • Accrued PF Vendor G/L account and Payable PF Vendor G/L account,
    • Accrued PF Company G/L account and Payable PF Company G/L account,
    • Choose WHT Government Vendor,for which liability will be created when WHT is posted,
    • Define Pension Fund (PF) % for Company and Vendor and choose appropriate vendor for liability posting,
    • Indicate PF expense G/L account.

  4. Select WHT Posting Groups on Item and Vendor Cards accordingly:

    • Select WHT Product Posting Group on Item Card,
    • Choose WHT Business Posting Group on Vendor Card.

  5. On Countries/Regions, enable Double-taxation Agreement if double-taxation agreements between countries exist, which defines whether Non-Resident Tax can be exempt or returned. For countries, option for marking Internal Business Trip is possible, which is then imported to Advance Statement Line Types.

WHT Calculation in Purchase Order​

  1. Create Purchase Order and fill out the header information. For more information, see Purchase Order.
  • WHT Business Posting Group and Country/Region will be imported from Vendor Card, which are editable and can be changed.
  • If selected Vendor has an indicated WHT Business Posting Group, where the Non-Resident field is enabled and Country/Region Code has Double Taxation Agreement ticked, it will automatically be imported to the Purchase Document, which can be changed.
  1. Select the item in purchase lines and fill out the line information:

  • WHT Posting Group will be imported from item card, if indicated,

  • WHT Amount LCY, PF (Vendor) amount LCY, PF (Company) amount LCY, Amount incl. WHT LCY, Amount incl. WHT and PF Vendor LCY. Amount incl. WHT and VAT LCY amounts will be calculated according to WHT settings. -If VAT Posting Setup line with combination of VAT Business posting group and VAT Product posting group has combination where VAT % is > 0:

    • For posting VAT, the system uses VAT posting setup: Combination of VAT Business Posting Group on vendor and VAT Product Posting Group on SMA WHT Setup > Purchase VAT Account,
    • VAT over WHT Amount in purchase line is calculated as WHT amount in purchase line * VAT Posting Setup: Combination of VAT Business Posting Group on vendor and VAT Product Posting Group on Service item > VAT Rate / 100,
    • Calculated VAT is posted seperately in line in posted purchase invoice as full VAT.

WHT Document Statistics tab has been added to the PO Factbox, where WHT and the PF amounts information is displayed in original currency and in local currency as well.


Note: If field Double Taxation Agreement = YES, then all WHT calculations and entries will be ignored.

“VAT over WHT” has to be enabled always by default.

  1. Post Purchase Order. On Posting Purchase Order, accrual postings are created according to WHT Posting Setup by WHT posting group comibinations.

  2. Create Payment. For more information, see Create Payment .

  • Indicate Posting Date > Document Type – Payment> Account Type – Vendor > choose a vendor from the posted purchase document > click Apply Entries,
  • Select the posted purchase invoice and Set Applies-to ID,
  • Post the Bank Payment Journal.

WHT and PF amount will be posted according to Purchase Document in proportion to indicated Payment Amount.

  • Check WHT Entries Table for created records.

WHT Payable Postings on Application from VLE​

WHT entries and transactions for WHT and PF payable accounts are generated from vendor ledger entries as well.

  • Creat Payment for a vendor who has posted purchase invoice transaction with WHT/PF accruals.
  • Select posted purchase invoice transaction, choose Apply Entries and choose the payment transaction, Set Applies-to ID and post application.
  • The transaction for reflecting WHT and PF payable liabilities are generated according to the WHT Posting Setup.

WHT Payable Postings on Bank Payment Journal​

WHT entries and transactions for WHT and PF payable accounts are generated from bank payment journal.

  • Create Payment,
  • Indicate Posting Date > Document Type – Payment > Account Type – Vendor > choose vendor
  • Tick the WHT checkbox in payment line,
  • WHT Business Posting Group will be filled out automatically from the vendor card if it is indicated, otherwise choose manually; WHT Product Posting Group will need to be selected and WHT and PF payables will be calculated according to the selected group combination in WHT Posting Setup,
  • WHT Entries will be generated during posting bank payment journal in such case,
  • Posted purchase invoice and payment should be applied from VLE; upon application of such transactions, none of the additional WHT and PF postings will be generated.

WHT Accrual Postings on General Journal Transactions​

WHT entries and transactions for WHT and PF accrual accounts are generated from general journal when invoice is created manually.

  • Create general journal entry,
  • Indicate Posting Date > Document Type – Invoice> Account Type – Vendor > choose vendor,
  • Tick the WHT checkbox in the payment line,
  • WHT Business Posting Group will be filled out automatically from the vendor card if it is indicated, otherwise choose manually; WHT Product Posting Group will need to be selected and WHT and PF payables will be calculated according to the selected group combination in WHT Posting Setup,
  • Indicate correcponding G/L account (if G/L has WHT Product Posting Group indictaed on the account card, it will be automatically retrieved in the journal line),
  • WHT Entries will be generated when posting bank payment journal in such case,
  • Posted purchase invoice and payment should be applied from VLE; upon application of such transactions, none of the additional WHT and PF postings will be generated.

Business Trips​

Georgia legislation sets norms for business trips, on the other hand company norms can be set by company policy. Business trip expenses proven by documents within state limits are not taxed and can be deducted from taxable income. Expenses over the state limit or not proven by documents are taxed by personal income tax, that is withheld and paid by the company.

Business Trip Setup​

  1. Indicate Code, City Description, Country/Region Code in Business Trip Cities.
  2. Indicate Code, Description and Expense Type to which it belongs.
  3. Add Advance Statement Line Types, indicate code, description, quantity by default is always 1, unit of measure, country, city (optional) and currency. Set Per Diem Limit, Accommodation Limit, Per Diem Limit on Over 30 Days, Organization Limit on Per Diem, Organization Limit on Accommodation and Currency per country and city. Direct Unit Cost is automatically filled out with Organization Limit. Indicate Starting and Endig Dates for each line, during which the advance type will be valid.
  4. Select Expense Types and Expense sub-types.
  5. Specify percentage by which Per Diem Amount should be reduced due to included meals in Tax Setup GE.
  6. In the WHT Setup field, Per Diem Long Term After indicates days after which business trip is considered to be long-term.

If the expense type is Per Diem and Meals Included is marked, then Tax Limit in the advance statement document line and Per diem Limit Long Term are calculated according to the following formula: Per Diem Limit x (1 - Tax Setup GE.Per Diem Limit with Meals).

Advance Statement​

  1. Create an Advance Statement document.

  2. Indicate Responsible Employee, Country, Business Trip City (optional), Real Start and Real End Dates and WHT Posting Group in the Advance Statement header.

  3. Choose Advance Type in lines, which is filtered according to Country and Currency.

The selected Advance Statement Line Type information will be imported in advance statement lines. Quantity will be calculated according to Total Calendar Days, which is calculated from real start and real end dates of the business trip.

  1. Indicate WHT Product Posting Group in lines.

WHT and PF will be calculated according to the formulas listed below.

If Documents Submitted is marked for each line, then the amount in Documented Expense Amount is automatically defaulted from Line amount excluding VAT value, which can be modified, but value cannot be more than Line amount excluding VAT.

  • Taxable Amount is calculated as follows:

    • a) If Document exp. > Tax limit total, then: Line Amount Exc. VAT – Tax limit total,
    • b) If Document exp. < Tax limit total, then: Line Amount Exc. VAT - Document exp.

If Expense type = Flight ticket and Flight class = Business, then taxable amount = line amount excl. VAT (it doesn’t consider rule a and rule b),

  • WHT Amount - Taxable Amount / ((100-WHT%)/100) * WHT%,

  • PF Vendor Amount - (Taxable amount + WHT amount) / ((100-PF % Ven-dor/100) * PF% Vendor,

  • PF Company Amount - (Taxable amount + WHT amount) / ((100-PF % compa-ny/100) * PF% Company.

  • If Quantity > Per Diem Long Term After then Taxable Amount is calculated as (calendar days before Per Diem Long Term After * Tax Limit) + (Per Diem Long Term After – Total calendar days) * Per Diem Limit Long Term)).

  • In Advance Type the Tax Only option is added which allows to select posted purchasse invoice which should be taxed with WHT and PF for specific employee. In such case no invoice amount transactions are posted upon posting of the Advance Statement document, only WHT and PF accrual and payable transactions are created for the indictaed invoice amount.

  • In advance statement document lines, select the Tax Only type, select a vendor, select the vendor posted purchase invoice (filtered by currency). Whole invoice amount will be retrieved, which can be modified. Taxable amounts are calculated as mentioned in above cases.


Note: If Document Submitted = No, the formula for calculating the Taxable Amount for Taxation field, regardless of the Tax Expense type and all above mentioned conditions, should be as follows: Direct Unit Cost x Quantity.

Upon posting the Advance Statement document, accrual postings are created according to WHT Posting Setup by WHT posting group comibinations.

Creating Payment from Advance Statement Document​

  • Create Payment by following the steps:

    • After filling out Advance Statement document, click Create Payment,
    • Choose General Journal Template and batch, then click OK,
    • All necessary fields will be filled from advance statement document, payment is posted as Advance Payment. If WHT checkbox is marked and WHT Posting Groups are indicated, WHT and PF payable transactions will be created upon posting payment,
    • Post Advance Statement Document, which should be posted with employee return date. The date can be changed in the document header. Advance Document posting will create WHT and PF accrual transactions.
    • For application of Payment and Advance Statement document, enter Vendor Ledger Entries and apply the posted payments. Exchange rate will be posted accordingly,
    • When payment is posted as an Advance Payment, after application to the posted document, WHT entries are not duplicated,
    • WHT entries will be created in the WHT Entries Table.

Note: WHT entries are always posted in the local currency.

Advance Payment from Bank Payment Journal​

  • Create Advance Payment by following the steps:

    • In Bank Payment Journal, select General Journal Template and Batch, then click OK.

    • Indicate document type – Payment, Account type – Vendor, mark Advance Payment field, specify the Amount.

    • Post the Bank Payment document. If WHT checkbox is marked and WHT Posting Groups are indicated, WHT and PF payable transactions will be created upon posting the payment.

    • Create a Purchase Order document with appropriate WHT and PF accrual entries and post the document.

    • To apply Advance Payment to Posted Purchase Invoice, enter Vendor Ledger Entries and apply payment entries to the Posted Purchase Invoice. For more information, see Apply Transactions .

    • WHT entries will be created in the WHT Entries Table.

Note: WHT entries are always posted in the local currency.


Inventory Shipment​

  1. Setup

    • Indicate Profit Tax and VAT Tax Authorities on TAX Setup GE,
    • Percentage of Profit Tax should be indicated on Tax Setup GE, in the Profit Tax FastTab,
    • In VAT Posting Setup, indicate VAT Balancing Account,
    • In General Posting Setup, indicate Profit Balancing Account and WHT Balancing Account.

  2. Item Shortage is charged with VAT and Profit Taxes.

    • Create an Inventory Shipment Document,
    • Indicate Inventory Shipment Document Header information,
    • Choose an item in document lines,
    • Indicate Quantity, Reason Code, Unit Price(automatically calculated as Unit Cost * (1+VAT% from setup)) and Item Tracking Information (if applicable),
    • Indicate Global Dimension,
    • Mark Taxable with Profit Tax and Taxable with VAT,
    • Select an entry from which the item should be written off in Applies-to Entry,
    • Post the Inventory Shipment Document.

Upon posting, the accounts for VAT transactions are taken from VAT Posting Setup Sales VAT Account and VAT Balancing Account. For profit tax, from Tax Setup GE and Profit Balancing Account in General Posting Setup.

Note: All General Ledger entries will be defined from the indicated Unit Price in the document lines. Unit Price always includes VAT.


  1. Calculation formula for Profit Tax:


Profit TAX: [(Quantity x Unit Cost)/(1-Profit Tax % from Tax Setup GE) x Profit Tax % from Tax Setup GE]

  1. Calculation formula for VAT Tax:


VAT: (Quantity x Unit Price )/(1- VAT % from selected VAT Business Posting Group and VAT Product Posting Group)

  1. Item gifting to Physical Person is charged with VAT and Income (WHT) Taxes.

    • Create an Inventory Shipment Document,
    • Indicate Inventory Shipment Document Header information, including WHT Business Posting Group,
    • Choose an item in document lines,
    • Indicate Quantity, Reason Code, Unit Price and Item Tracking Information (if applicable),
    • Indicate Global Dimension,
    • Choose WHT Product Posting Group and an employee in lines,
    • Mark the WHT Tax and Taxable with VAT checkboxes,
    • Select an entry from which the item should be written off,
    • Post the Inventory shipment Document.

  1. Calculation formula for Witholding Tax:


Amount for Income Tax (WHT) = [(Quantity x Unit Price / (1 - WHT %)) x WHT%]

  • Accounts fot WHT and PF are taken from WHT Posting Setup Payable accounts and General Posting Setup indicated in WHT Balancing Account,
  • Check the WHT Entries Table for created records.

WHT Entries Reversals​

  1. Reverse a WHT Transaction:

    • If a transaction, which created WHT entries and corresponding transactions for Revenue Service vendor, has to be reversed from Vendor Ledger Entries, the WHT Entries transactions are not affected and must be reversed separately.
    • a WHT Entries transaction needs to be selected in the WHT Entries table and clicked in the Reverse Transaction process tab; after this, the entries will be reversed in the Vendor Ledger Entries and WHT entries as well.

In WHT Entries reversed transaction is marked accordingly and Entry No by which it was reversed also is indicated in the entry line.

Note: Reversed WHT entries are omitted from the Income Tax declaration.


Advance Statement Document for Expenses​

  • Indicate the Advance Statement document header information, including date, employee and WHT Business Posting Group.
    • Choose Type in document line,
    • Indicate Amount,
    • Select Documents Submitted if documents were provided by employee,
    • Select WHT Product Posting Group in document lines,
    • Post the document.

WHT and PF will be calculated according to the WHT Business Posting Group and WHT Product Posting Group combination and WHT Posting Setup.

If Documents Submitted is checked for the line, then WHT and PF will not be calculated even if the WHT Posting Setup states otherwise.

Upon posting the advance document, WHT and PF accrual transactions will be created according to WHT Posting Setup.

Note: WHT and PF payable will be reflected in accounting transactions upon application of appropriate payment to Advance Statement document if not posted on payment transactions.

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