| Withholding tax postings |  |
| If you process a purchase invoice to which withholding tax applies, ERP LN creates a sequence of postings for the various withheld income tax and social contribution amounts. If you complete a tax declaration, ERP LN creates the following financial postings: Submit the tax declaration If you submit the tax declaration, ERP LN creates contra postings of the tax amounts on the ledger accounts linked to the tax codes, and posts the total payable amount to the interim account for payable tax. Make the payments If you process the standing order, ERP LN creates a contra posting of the paid amount on the interim account for payable tax. If you use a different method to pay the tax or if you delete the standing order, you must create a journal entry to clear the tax interim account. The Tax Type of the group tax code indicates the moment at which the tax obligation arises. For withholding tax and social contributions, the tax type can be: Normal The tax obligation arises at purchase invoice registration. Payment is periodically when you pay the tax declaration. On Payments The tax obligation arises at purchase invoice payment. When you pay the purchase invoice, ERP LN automatically generates a standing order in Cash Management to pay the tax to the collection office. Related topics Withholding tax paid periodically - postings Withholding tax on payment postings Value added tax (VAT) postings To process tax declarations |