Withholding tax is a government requirement whereby the payer of an income withholds or deducts the tax from the payment and pays the tax to the authorities. This can apply to employment income, payments of interest, dividends, royalties, rent, and et cetera. Thus, the tax is deducted before payment is made and may be refunded later depending on the circumstances. In Thailand, there are various types of taxes levied on a company or individual. Certain types of income paid to companies are subject to withholding tax at source. The withholding tax rate depends on the type of income and tax status of the recipient. The payer of the income is required to file the return and submit the amount of tax withheld to the tax authorities. The tax withheld is later credited against the final tax liability of the taxpayer.
In this product update, the following enhancements have been made to the withholding tax functionality for the Thai legislation.
The following changes are applicable if SE1000 – E-Account is included in the license.
The changes are applicable to single and multiple tax environments and are controlled by the Use tax module setting.
The withholding tax functionality only supports purchase invoices and prepayments where the transaction currency is in the default currency.
On the Tax codes page, two new options, VAT and Withholding tax, have been added at Tax type as displayed in the following scree
When you select the Withholding tax option at Tax type, the Transaction type field will be disabled and the Purchase option will be selected by default. The option Withholding tax is only applicable for purchase invoices in a single tax environment.
When you select the Withholding tax option at Tax type, the Transaction type field will be enabled. The Both option will be removed from the Transaction type and you will see only the Purchase and Sales options. By default, the Purchase option is selected.
If you select Sales at Transaction type, the existing behavior shall apply when the Use tax module check box in General ledger settings is selected and Withholding tax option at Tax type is selected.
When you click the EU tab, the message “No EU” is displayed.
When you click the VAT boxes tab, the message “No VAT boxes” is displayed.
During Exact Globe update for multiple tax environment, and if the transaction type is Purchase, the Tax to pay account field is a mandatory field. Here, you are required to redefine the general ledger account and select a neutral type account.
You can create new tax codes, edit the existing tax codes, and link tax boxes to the tax codes. The predefined tax boxes represent withholding tax types, which are consistent with the fields in the withholding tax certificate.
A new menu path, Finance à VAT à Statistics à Withholding tax, has been introduced.
A new menu path, Finance à VAT à Statistics à Assessment for invoices, has been introduced. Here, you can assess the withholding tax for purchase invoices. The function creates the necessary financial entries to book the withholding tax in the predefined general journal.
A new menu path, Finance à VAT à Statistics à Assessment for prepayments, has been introduced. Here, you can assess the withholding tax for prepayments. The function creates the necessary financial entries to book the withholding tax in the predefined general journal.
A new menu path, Finance à VAT à Statistics à Certificates, has been introduced. Here, you can print withholding tax certificate slips for assessed withholding tax amounts.
A new menu path, Finance à VAT à Statistics à Reports, has been introduced. Here, you can print withholding tax reports for submission to the local tax authority. The reports reflect an overview of all paid withholding tax information and are segregated by the type of supplier, for example, a business entity or an individual.
Note: In order to delete, void, or edit the purchase entry after the assessment, the withholding tax must be deleted first.
Note: This is also applicable to the General journal entry, Bank/cash journal, and the Purchase order entry.
You cannot void the entries when the tax certificates and reports are printed. When you void the purchase entry or withholding tax entry, a warning message will be displayed.