I got many requests from my customers on how to automatically manage the newly added governmental 5% Vendors Service Tax on all service vendors payments, with few hints from friends and researches, I been able to handle this tax using the built in Withholding Tax, below are the steps required to setup the tax:
1. Go to “Microsoft Dynamics GP menu >> Tools >> Setup >> Company >> Company” and click on “Options”:
Setup the tax committee as a vendor in your AP and fill it in the above form.
Go to “Cards >> Purchasing >> Vendor” and click on the added “Withholding” button, mark this vendor to be subject to the withholding deduction and define the deduction percent:
Now go to AP Transaction Entry “Transactions >> Purchasing >> Transaction Entry” and select your vendor, where a message will popup checking if this invoice will be subject to withholding:
So far, nothing will be affected financially but the document will be marked for deduction on the next payment.
To pay this vendor, go to “Transactions >> Purchasing >> Manual Payments” and select your vendor, then fill the amount you need to pay, and apply this payment the to invoice, where the system will automatically calculate the withholding amount as shown below:
Open the distribution and make sure that the Withholding Account “WH” was added to your invoice.
Post the payment and enjoy having the tax automatically calculated.