Withholding tax (WHT) is the tax withheld by a company when it makes a payment to a vendor, in which the full amount owed to the vendor is reduced by the tax withheld.
The withheld tax is then remitted to the Egyptian Taxation Authority (ETA) when the next reporting cycle is submitted.
If a supplier without an exemption provides an invoice, a withholding tax amount must be withheld if the total amount of the invoice is more than the threshold amount.
To use withholding tax, you must set up additional fields in the Vendors and Company Information so that the correct information is printed in the Tax form 41.
As a prerequisite, you need to set up at least one account for Withholding Tax Payable.
The following procedure describes how to set up Payables Account for WHT.
To set up a Payables Account for withholding tax
- Choose the icon, enter Chart of Accounts, and then choose the related link.
- Create a new Account or edit an existing one. Fill in the fields as described in the following table.
|Name||Write WHT then space at the beginning of the name.|
3. Choose the OK button.