Manage Indian Withholding Tax

Accounting
1

Hi There,

I am based in the UK and have an Indian customer. We recently invoiced them say £9,000, they then paid say £8000 as there is withholding tax.

When I tag the payment against the invoice, how do I account for the £1000 difference?

Many thanks in advance

2

I have had the same thing. I don’t know if it is correct, but I created a new nominal account under Direct Expenses named Foreign withholding tax. The full invoice amount went in General Export Sales, and the withholding tax deducted went in the new Direct Expenses account.

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