Set up withholding tax in System administration and General ledger

Important

This content is archived and is not being updated. For the latest documentation, see Microsoft Dynamics 365 product documentation. For the latest release plans, see Dynamics 365 and Microsoft Power Platform release plans.

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature Pack, Microsoft Dynamics AX 2012

Withholding tax is a tax on vendors that does not create sales tax transactions. Withholding tax that is calculated on vendor payments is a liability. Therefore, only balance sheet accounts or liability accounts are valid accounts for posting withholding tax.

Withholding tax is reported in fixed reports.

  1. Click System administration > Setup > Licensing > License configuration.

  2. Expand the General ledger node and select the Withholding tax check box.

  3. Click General ledger > Setup > Withholding tax > Withholding tax codes.

  4. Create withholding tax codes with values and limits.

  5. Click General ledger > Setup > Withholding tax > Withholding tax groups.

  6. Create withholding tax groups and add the relevant withholding tax codes on the Setup tab.

See also

(Global, AUS, ITA) Set up withholding tax for a vendor

Calculate and post withholding tax