Thank you Derek for your answer. In my case I am not accountable whether or not my client pays the 20% Withholding Tax but it is obligatory to be written in the invoice as a seperate line. It would be nice for me to have a report every year for this amount but it is optional. On the other hand I need to keep track of the 24% VAT, because I have to deposit the VAT I recieve to the goverment every 3 months.
On Wed, 2021-01-27 at 09:17 -0500, Derek Atkins wrote: > Hi, > > On Wed, January 27, 2021 8:49 am, Nikos Parafestas wrote: > > Beacuse of the taxation sytem in my country I need to add > > withholding > > tax and VAT in seperate fields in the invoice. This applies to > > every > > tansaction with a net price of 300 euro or more. > > The first thing to note is that GnuCash only allows you to apply a > single > Tax Table per invoice line-item, but each line item can have its own > unique tax-table. You can (I believe) supply a "default tax table" > which > gets applied. There is no way to set a floor, meaning that you will > need > to manually determine if/when the tax(es) apply. > > > For example if the Net Price is 1000 euro the invoice should > > include > > the following: > > --- > > 1. Net Price = 1000 euro > > 2. VAT = 240 euro > > 3. Total Price 1240 euro > > 4. Withholding Tax (which is 20% of the Net Price. This amount the > > client pays directly to the goverment not to me) = 200 euro > > 5. Payable (Total - Witholding Tax) = 1040 euro > > ---- > > > > 1-3 : I have managed to add them correctly > > 4 & 5: I don't have a clue how to add them. > > The best way to think about your particular case is with some > algebra, and > you'll need to help me a bit to fill that in. > > GnuCash has two ways to compute taxes: either they are included in > the > price, or they are added to the price. > > If tax is included, then the line-item price is what the user pays, > and > the tax is computed in such a way that value+tax = price. In other > words, > if the price is $100 and 5% tax is included, then the customer pays > you > $100, of which $4.76 is tax (because 5% of $95.24 is 4.76, and 95.24 > + > 4.76 == 100). > > If the tax is added on, then the line-item price is the basis for the > tax, > and the user pays the price+tax total. In other words, if the price > is > $100 and there is 5% tax, the user pays $105. > > Now, back to the GnuCash tax tables. You can include multiple taxes > in a > tax table, but the two are independent. So let's say you have a 5% > state > tax and a 2% city tax, where the user pays a total of 7%. This is > easy, > you have two entries in the tax table, one for 5% and one for 2%. > > However, there are places (e.g. Canada), where one tax includes the > other. > For example, you might have a 10% GST and a 7% PST, where the PST > *includes* the GST. In this case, you would put the 10% GST in one > tax > table line, but for PST you cannot say 7%, because the 7% includes > the > 10%. This is where the algebra comes in. To compute the PST, you're > want > to compute x% where: > > x% of price = 7% of (price + 10% of price) > x * price = .07 * (1 + 0.1) price > x = .07 * (1 + 0.1) > = .077 > = 7.7% > > So you would enter GST of 10% and PST of 7.7% to get the correct > taxes > computed. > > Now, back to YOUR case. It sounds like you have: > price = 1000 > VAT = 24% of the price > Withholding = is 20% of price > Invoice amount is price + VAT - Withholding > > So really, the invoice amount is price + 4%. > > It sounds like you need to actually show VAT and Withholding amounts > on > the invoice. Do you need to actually RECORD the VAT + Withholding > amounts, or just display them on the invoice? What if the customer > does > not actually pay the withholding to the government? Are you still on > the > hook for it? > > I am asking because the answer to these questions will tell us if we > need > to handle it within the tax table system, or by the invoice report. > > If you are only on the hook for 4%, regardless of whether they pay or > not, > then you should probably just record the 4% and update the invoice to > report the 24% and 20% values. However if you need to actually > record > that, we might have a SMALL problem, because I am not sure that > GnuCash > supports a "negative" rate, which is what you would need for the > withholding. > > > I hope I made it clear. > > Ditto.. > > > ps. If you want to help I would like to ask you to provide your > > answers > > in a way that a novice user like me can understand. > > I hope what I've written above helps you -- but you'll still need to > fill > in the blanks. > > > Please remember to CC this list on all your replies. > > You can do this by using Reply-To-List or Reply-All. > > -derek > _______________________________________________ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
