Withholding tax

[mpow...@gmail.com]

Hi everyone,

there seem to be various options of implementing withholding tax functionality in iDempiere. In Thailand, the withholding tax is deducted upon payment of vendor invoices and upon collection of a customer invoices. 

Since we require Withholding tax functionality also in other countries, I'm looking for the most generic of available Withholding tax solutions which works on the latest iDempiere version 3.1.0.

What is the most proven solution/approach to implement Withholding tax functionality?

There is an approach using the columbian localization: https://bitbucket.org/CarlosRuiz_globalqss/globalqss-idempiere-lco/src?at=361_maintenance

There is another link to an aDempiere version and but it's entirely in Spanish: http://www.adempiere.com/LCO_Retenciones_Colombia 

This link was posted by Carlos in one of his forum posts: http://wiki.idempiere.org/en/Plugin/LCO_Detailed_Names#P2_Repository 

and this one as well: http://ci.idempiere.org/job/globalqss-iDempiere-LCO2.0/ws/buckminster.output/org.globalqss.update_2.0.0-eclipse.feature/site.p2/plugins/org.globalqss.idempiere.LCO.withholdings_2.0.0.v20140308-1417.jar  

There is also a link to a Thai localization solution:

http://red1.org/adempiere/viewtopic.php?f=45&t=1806 As for the LCO, where can I find the latest jar plugin? Thanks, Michael

[redhuan d. oon]

The top active, always accepting others' contributions, and well maintained repo has to be the source. Thus I assumed it is Carlos Ruiz GlobalQSS link. (Even if others try to be the main source (usually cheap advertising effort) we still have to regard based on the criteria i mentioned.) So just check his source activity. Also inform us if you find others more qualified.

[mpow...@gmail.com]

Thanks redhuan, can you please advise where I can find the latest plugin jar for the LCO?

Thanks,

Michael

[Carlos Antonio Ruiz Gomez]

Hi Michael, I just changed the instructions to the latest I'm using to install LCO here:
http://wiki.idempiere.org/en/Plugin:_LCO_Detailed_Names#P2_Repository

Regards,

Carlos Ruiz


El 23/02/16 a las 00:50, mpow...@gmail.com escribió:

[Michael Powacht]

Thanks Carlos, will check it out shortly and feedback.

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[mpow...@gmail.com]

Hi Carlos, 

my colleague back at the office (I'm travelling this week) has tried to install the plugin and here is what he found:

When installing it using the 'recommended' way I get an error as below, but when installing it though Felix web console it seems to install ok. I checked and found there are indeed some extra features related to withholding tax in the sandbox system now.

Thanks again,

Michael

[mpow...@gmail.com]

Hello Carlos, I need your advise please: 

I just installed (without errors) and checked out your LCO Withholding tax function and I successfully simulated a Withhholding tax process using WHT deduction at payment up until the stage of payment where I'm facing a problem using Payment=>Allocate.

The system correctly creates a WHT line in the Payment=>Withholding tax subtab but does not deduct the WHT amount (3% of 10000 = 300) from the invoice amount (10000) when populating the Payment amount field. 

Instead, the payment amount field still shows 10000. See large screenshot below. 

When I then manually change the payment amount to 9700 (10000 minus 300 WHT deduction), the system populates the Over/Under payment field with 300. When trying to Complete the payment document the system issues error message:

Can you please help?

On Tuesday, February 23, 2016 at 7:01:25 AM UTC+7, Carlos Antonio Ruiz Gómez wrote:

[Carlos Antonio Ruiz Gomez]

Hi Michael,

What you're mentioning sounds related to the "Is Calc on Invoice" vs "Is Calc on Payment" configuration on Withholding Calc, and the resulting record on the Invoice Withholding

On payment time just the withholding records marked as "Is Calc on Payment" are taken into account.

Regards,

Carlos Ruiz


El 31/08/16 a las 06:08, mpow...@gmail.com escribió:

[Michael Powacht]

Thanks Carlos, I can confirm that it was properly defined as "Is Calc on payment". 

In the screenshot I sent earlier this can also be seen in the Payment=>Withholding tax subtab where it says "Is Calc on payment=Y".

Where else could the problem be?

Thanks,

Michael

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[Carlos Antonio Ruiz Gomez]

Thanks Michael, reviewed the case in more detail and it was a bug on the payment window, fixed already and released the version 3.1.1 of the LCO_Withholdings plugin.

Regards,

Carlos Ruiz


El 31/08/16 a las 11:28, Michael Powacht escribió:

Thanks Carlos, I can confirm that it was properly defined as "Is Calc on payment". 

In the screenshot I sent earlier this can also be seen in the Payment=>Withholding tax subtab where it says "Is Calc on payment=Y".

Where else could the problem be?

Thanks,

Michael

On Wed, Aug 31, 2016 at 3:45 PM, Carlos Antonio Ruiz Gomez <car...@gmail.com> wrote:

Hi Michael,

What you're mentioning sounds related to the "Is Calc on Invoice" vs "Is Calc on Payment" configuration on Withholding Calc, and the resulting record on the Invoice Withholding

On payment time just the withholding records marked as "Is Calc on Payment" are taken into account.

Regards,

Carlos Ruiz


El 31/08/16 a las 06:08, mpow...@gmail.com escribió:

Hello Carlos, I need your advise please: 

I just installed (without errors) and checked out your LCO Withholding tax function and I successfully simulated a Withhholding tax process using WHT deduction at payment up until the stage of payment where I'm facing a problem using Payment=>Allocate.

The system correctly creates a WHT line in the Payment=>Withholding tax subtab but does not deduct the WHT amount (3% of 10000 = 300) from the invoice amount (10000) when populating the Payment amount field. 

Instead, the payment amount field still shows 10000. See large screenshot below. 

When I then manually change the payment amount to 9700 (10000 minus 300 WHT deduction), the system populates the Over/Under payment field with 300. When trying to Complete the payment document the system issues error message:

Can you please help?

[Michael Powacht]

Thanks a million Carlos. I'll check it out tomorrow.
Michael

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[Michael Powacht]

Hello Carlos,

there seems to be an issue with the new version 3.1.1 of your plug-in. When installing it, it shows several error messages in the OSGI console:

java.io.IOException: org.json.JSONException: Duplicate key "Used Services"

at org.apache.felix.webconsole.internal.core.BundlesServlet.writeJSON(BundlesServlet.java:635)

at org.apache.felix.webconsole.internal.core.BundlesServlet.writeJSON(BundlesServlet.java:557)

at org.apache.felix.webconsole.internal.core.BundlesServlet.renderContent(BundlesServlet.java:531)

at org.apache.felix.webconsole.AbstractWebConsolePlugin.doGet(AbstractWebConsolePlugin.java:194)

I also tried to install this plugin on a fresh instance, that is, without first installing the 3.1.0 version where I encounter the same error message as before.

Would appreciate if you could have a look,

Michael

[mpow...@gmail.com]

Hi Carlos,

after some more investigation I found that the plug-in works perfectly whenever deploying it directly in a binary instance using the Felix console but it fails with below error message whenever trying to run it in my development environment.

We have verified this behavior on multiple instances and we made sure to materialize the project to get the latest libraries. Do you have an idea where the issue could be ?

regards,

Michael 

[Carlos Antonio Ruiz Gomez]

Hi Michael, I've never tried that way.

The code is published, so what I do is import the projects into your
eclipse and run from there:
https://bitbucket.org/CarlosRuiz_globalqss/globalqss-idempiere-lco/

Regards,

Carlos Ruiz


El 02/09/16 a las 06:36, mpow...@gmail.com escribió:

[Michael Powacht]

Many thanks Carlos, will check it out !
Michael

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[Michael Powacht]

Hi Carlos,

want to confirm that everything works now!

Thanks again!

Michael

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[Michael Powacht]

Hello Carlos,

I found a problem with LCO Withholding: 

I process an invoice and a payment in foreign currency (EUR), that is, a currency different from my primary schema's currency (USD) and my local schema's currency (THB):

The system correctly deducts the WHT amount in foreign currency during payment but the accounting facts generated from the Allocation document are incorrect: 

The WHT amount in foreign currency does not get converted into primary schema and local schema currency. 

It just posts the same WHT amount into all schemes. As a result the Debit/Credit totals don't match up in all schemes. Example: 

Invoice Amount EUR 10000, WHT=3% = WHT in foreign currency = 300. The system posts WHT of 300 in all my schemes, ie USD and THB schema: 

Please refer to screen shot below:

​​

Please let me know what you think,

Michael

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[iqbal muhammad]

Could you try to set Calc on Invoice, instead of Calc on Payment in Withholding Type window, tab Withholding Calc.

It works for my case.

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[Carlos Antonio Ruiz Gómez]

Hi Michael, solved here:

http://bitbucket.org/CarlosRuiz_globalqss/globalqss-idempiere-lco/commits/8e7f4fc

Regards,

Carlos Ruiz

On Thursday, 8 September 2016 06:13:28 UTC+2, Michael Powacht wrote:

Hello Carlos,

I found a problem with LCO Withholding: 

I process an invoice and a payment in foreign currency (EUR), that is, a currency different from my primary schema's currency (USD) and my local schema's currency (THB):

The system correctly deducts the WHT amount in foreign currency during payment but the accounting facts generated from the Allocation document are incorrect: 

The WHT amount in foreign currency does not get converted into primary schema and local schema currency. 

It just posts the same WHT amount into all schemes. As a result the Debit/Credit totals don't match up in all schemes. Example: 

Invoice Amount EUR 10000, WHT=3% = WHT in foreign currency = 300. The system posts WHT of 300 in all my schemes, ie USD and THB schema: 

Please refer to screen shot below:

​​

Please let me know what you think,

Michael

On Wed, Aug 31, 2016 at 7:44 PM, Carlos Antonio Ruiz Gomez wrote:

Thanks Michael, reviewed the case in more detail and it was a bug on the payment window, fixed already and released the version 3.1.1 of the LCO_Withholdings plugin.

Regards,

Carlos Ruiz


El 31/08/16 a las 11:28, Michael Powacht escribió:

Thanks Carlos, I can confirm that it was properly defined as "Is Calc on payment". 

In the screenshot I sent earlier this can also be seen in the Payment=>Withholding tax subtab where it says "Is Calc on payment=Y".

Where else could the problem be?

Thanks,

Michael

On Wed, Aug 31, 2016 at 3:45 PM, Carlos Antonio Ruiz Gomez wrote:

Hi Michael,

What you're mentioning sounds related to the "Is Calc on Invoice" vs "Is Calc on Payment" configuration on Withholding Calc, and the resulting record on the Invoice Withholding

On payment time just the withholding records marked as "Is Calc on Payment" are taken into account.

Regards,

Carlos Ruiz

El 31/08/16 a las 06:08, mpowacht escribió:

Hello Carlos, I need your advise please: 

I just installed (without errors) and checked out your LCO Withholding tax function and I successfully simulated a Withhholding tax process using WHT deduction at payment up until the stage of payment where I'm facing a problem using Payment=>Allocate.

The system correctly creates a WHT line in the Payment=>Withholding tax subtab but does not deduct the WHT amount (3% of 10000 = 300) from the invoice amount (10000) when populating the Payment amount field. 

Instead, the payment amount field still shows 10000. See large screenshot below. 

When I then manually change the payment amount to 9700 (10000 minus 300 WHT deduction), the system populates the Over/Under payment field with 300. When trying to Complete the payment document the system issues error message:

Can you please help?

On Tuesday, February 23, 2016 at 7:01:25 AM UTC+7, Carlos Antonio Ruiz Gómez wrote:

Hi Michael, I just changed the instructions to the latest I'm using to install LCO here:
http://wiki.idempiere.org/en/Plugin:_LCO_Detailed_Names#P2_Repository

Regards,

Carlos Ruiz

El 23/02/16 a las 00:50, mpowatch escribió:

[mpow...@gmail.com]

Thanks Carlos, will check it out shortly and get back to you !

Wish you a great weekend!

[mpow...@gmail.com]

Good day Carlos, 

I tested and everything works as expected. I also simulated a scenario where the currency rate at invoice (eg. EUR->THB) is different from the currency rate at payment and the allocation document correctly posts to the Realized Exch. Gain/Loss accounts

in the local accounting schema. 

Many, many thanks!

Michael

[mpow...@gmail.com]

Hello Carlos,

hope you are fine. Congrats to you and the community to another year of winning the Bossie awards!!

After further testing, I found another bug in LCO WHT:

During payment Menu=>Payment, I change the currency type from SPOT to another currency type, e.g. BOT. In the allocation document generated after payment, the system converts all lines using BOT but the WHT line gets converted using SPOT creating a GL posting imbalance like this. I believe the system needs to use the currency type specified in the payment document to convert all posting lines. The resulting difference between rate at invoice and rate at payment should be posted to realized foreign exchange gain/loss. 

Example data below:

Invoice: EUR => THB rate type=Spot 1:42

Payment: EUR => THB rate type=BOT 1:38.74

The WHT line of THB 126 was converted using Spot 42 but should have been converted with 38.74 where the GL postings will balance.

Thanks again,

Michael

[mpow...@gmail.com]

Hi Carlos, please let me know if you require any further information regarding the issue below.

Cheers,

Michael

[Carlos Antonio Ruiz Gomez]

Hi Michael, solved, you need to upgrade your core 3.1 before the LCO plugin.

Regards,

Carlos Ruiz


El 23/09/16 a las 03:34, mpow...@gmail.com escribió:

> Hello Carlos,
> hope you are fine. Congrats to you and the community to another year
> of winning the Bossie awards!!
>
> After further testing, I found another bug in LCO WHT:
> During payment Menu=>Payment, I change the currency type from SPOT to
> another currency type, e.g. BOT. In the allocation document generated
> after payment, the system converts all lines using BOT but the WHT
> line gets converted using SPOT creating a GL posting imbalance like
> this. I believe the system needs to use the currency type specified in
> the payment document to convert all posting lines. The resulting
> difference between rate at invoice and rate at payment should be
> posted to realized foreign exchange gain/loss.
> Example data below:
> Invoice: EUR => THB rate type=Spot 1:42
> Payment: EUR => THB rate type=BOT 1:38.74
> The WHT line of THB 126 was converted using Spot 42 but should have
> been converted with 38.74 where the GL postings will balance.
>

> Thanks again,
> Michael

[mpow...@gmail.com]

Many thanks Carlos ! Will check it out early next week.

Michael

[mpow...@gmail.com]

Hi Carlos,

upgraded to 3.1, re-installed your LCO plugin and everything looks good so far.

Thanks,

Michael

[mpow...@gmail.com]

Hello Carlos, 

I performed some more tests and I found that no (negative) WHT line is generated in the WHT tab for AP Credit Memos. Credit memos can come in 3 variations:

1. The original invoice was already paid (to the supplier) and a Withholding tax liability already posted in credit. After entering an AP Credit memo and when receiving a refund from the vendor (negative payment), the payment allocation document needs to post a debit to WHT liability.
2. The original invoice was not yet paid and we enter an AP Credit memo for a partial amount of the original invoice value. When making a payment for the difference between invoice and credit memo, the payment allocation document needs to credit the full WHT liability of the original invoice and debit the WHT portion of the credit memo. Alternatively, a WHT posting as the difference between WHT Invoice and WHT Credit memo could be posted but I think option 1 would be more transparent and compliant. 
3. The original invoice was not yet paid and we enter a full AP Credit memo. When making a payment of zero by allocating invoice and credit memo or when offsetting the invoice against the credit memo in full using Menu=>Payment Allocation, the payment allocation document should post the WHT liability of the original invoice in credit and the same WHT amount for the credit memo in debit. Alternatively, there is no WHT posting at all but I think option 1 would be more transparent and compliant.

Without having checked the Receivables side, I think the same issue applies there as well.

Please let me know what you think Carlos,

Michael

[mpow...@gmail.com]

Hi Carlos, 

I need to correct my earlier statement and apologize: The system DOES generate a withholding tax line for Credit memos, I realized that the WHT indicator in the document type for AP credit memo was set to "No" :-(. 

However, there is still an issue involving credit memos:

• I make an AP payment and allocate an invoice with WHT and a credit memo with WHT in Payment=>Allocate.
• When entering the AP credit memo in the Allocate sub-tab of the payment window, the Payment amount is represented with minus but the write-off amount for WHT is populated with a positive amount instead of a negative amount. As a result, the system shows a value in field "Remaining amount". 
• When I manually change the positive write-off amount to a negative write-off amount in the Allocate-sub-tab, the "Remaining amount" becomes zero as expected.
• When trying to complete the payment document, an error message "LCO_WriteOffLowerThanWithholdings" is issued.

Thanks,

Michael

[mpow...@gmail.com]

Hi Carlos, 

do you agree with my assessment regarding the WHT issues for credit memos?

Thanks,

Michael

[Carlos Antonio Ruiz Gomez]

Solved here:  https://bitbucket.org/CarlosRuiz_globalqss/globalqss-idempiere-lco/commits/5132608

El 08/10/16 a las 03:33, mpow...@gmail.com escribió:

[mpow...@gmail.com]

Many thanks Carlos!

[mpow...@gmail.com]

Hi Carlos,

I test the solution and it seems there is a problem when allocating a credit memo with Withholding tax:

Invoice amount = 1000 - 3% WHT = 970

Credit Memo: 200 - 3% WHT = 194

Total Payment amount of invoice and credit memo combined should be 970 - 194 = 776

...but the system shows a remaining amount of 12 because for the credit memo, the Withholding tax amount is added instead of deducted, so instead of -206 it should be -194:

Thanks again,

Michael

[Carlos Antonio Ruiz Gomez]

I was not able to reproduce this - you can try on https://demo.globalqss.com/webui


El 17/10/16 a las 09:04, mpow...@gmail.com escribió:

Hi Carlos,

I test the solution and it seems there is a problem when allocating a credit memo with Withholding tax:

Invoice amount = 1000 - 3% WHT = 970

Credit Memo: 200 - 3% WHT = 194

Total Payment amount of invoice and credit memo combined should be 970 - 194 = 776

...but the system shows a remaining amount of 12 because for the credit memo, the Withholding tax amount is added instead of deducted, so instead of -206 it should be -194:

[mpow...@gmail.com]

Thanks Carlos, something got messed up in my Dev. Environment and I re-imported your commits. Tested again and everything works as expected! 

Thanks a lot! I plan to do some more testing tomorrow involving some foreign currency transactions with Realized Gains/Losses.

THANKS AGAIN!!

Michael

[mpow...@gmail.com]

Hi Carlos, 

I just realized that Withholding tax deductions on Receivables are posted (view allocations) to the same GL account as WHT tax for Payables. 

I checked my setup and the WHT tax rate has 2 different GL accounts defined in TAX DUE (payables) and TAX CREDIT (receivables) in all my accounting schemes.

Is this a bug?

Thanks,

Michael 

[mpow...@gmail.com]

Hi Carlos,

coming back to the point above, it appears as if the Withholding GL accounts are being swapped:

Withholding tax receivable GL comes from GL defined in Tax rate=>Accounting=>"Tax Due".

Withholding tax payable GL comes from GL defined in Tax rate=>Accounting=>"Tax Credit".

Following the input/output VAT logic, I think it should be the other way round.

Thanks,

Michael

[mpow...@gmail.com]

Hi Carlos, 

did you have a chance to check this out?

Thanks,

Michael

[iqbal muhammad]

Have you tick Sales Transaction in Withholding Type window?

[mpow...@gmail.com]

yes I did, you see the system really swaps the 2 GL accounts.

[iqbal muhammad]

Well, I am not a tax expert ;D, but here what we are using

VAT

Tax Due is Tax Payable VAT Out (liability) -- Sales

Tax Credit is Prepaid Tax VAT In (asset) -- Purchase

WHT

Tax Due is Prepaid Tax WHT (asset) -- Sales

Tax Credit is Tax Payable WHT (liability) -- Purchase

So there is a difference in/out logic between VAT and withholding, and Carloz's LCO Withholding does its job (at least that what our accountant said :D )

Regards,

[Michael Powacht]

Thanks Muhammad, that's exactly where I see the inconsistency.

For VAT, "Tax Due" is considered a liability and "Tax credit" an asset whereas for WHT, "Tax Due" is considered an asset and "Tax Credit" a liability. A withholding tax credit for the company needs be treated as a balance sheet asset like "input VAT" and Withholding tax Due should be treated as a balance sheet liability like "output VAT". Everything else about WHT works as expected, it's only this GL account swap issue I'm left with. 

In any case, I think it's best if I swap my GL settings in all my accounting schemas because I'm afraid changing the logic at this point may cause lots of changes in companies where LCO WHT is in operational use. 

Thanks for your thoughts,

Michael

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[Kooshal Greedharry]

Hello everybody,

Can you please help me.

Does anyone has the latest plugin for Withholding Tax.

I am using V2.0 and I think it has some bugs. My withholding tax is not calculating.

Thanks for your help

Kind Regards,

Kooshal

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[iqbal muhammad]

https://bitbucket.org/CarlosRuiz_globalqss/globalqss-idempiere-lco/src/3d74650f1898eadd43dbaf908377c593da2e63cb/org.globalqss.idempiere.LCO.withholdings/?at=default