## Documentation Index

Access the complete documentation index at:
https://www.zoho.com/en-ng/books/help/llms.txt

Use this file to discover all available documentation pages before proceeding.

# Withholding VAT

Under the Nigeria Finance Act, a payer must withhold VAT at source on specific types of payments and remit it to the Federal Inland Revenue Service (FIRS) by the 21st of the following month.

In Zoho Books, you can create transactions, apply withholding VAT, record payment for the remaining amount, and track transactions where withholding VAT is deducted.

## Enable Withholding VAT

To deduct withholding VAT in your transactions, you must first enable it in your organisation.

Here’s how:

*   Go to **Settings**.
*   Select **Taxes** under _Taxes & Compliance_.
*   Select **Withholding VAT Settings** in the left pane.
*   Enable the toggle next to **Withholding VAT**.
*   Select for whom you want to enable withholding VAT in the **Enable Withholding VAT Settings For** field. You can choose **Customers**, **Vendors**, or **both**.

![Withholding VAT Settings](/en-ng/books/help/images/settings/withholding-vat/enable-wv.png)

*   Click **Save**.

Withholding VAT will now be enabled for your organisation.

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## Enable Withholding VAT for Customers and Vendors

To enable withholding VAT for a customer:

*   Go to _Sales_ on the left sidebar and select **Customers**.
*   Click **\+ New** in the top right corner and enter the required details.
*   To enable it for an existing customer, select the required customer and click **Edit** at the top of the customer’s _Details_ page.
*   In the _Other Details_ section, enable **Apply Withholding VAT for this customer**.
*   Click **Save**.

Withholding VAT will be enabled for your customer.

Similarly, you can enable withholding VAT for a vendor:

*   Go to _Purchases_ on the left sidebar and select **Vendors**.
*   Click **\+ New** in the top right corner and enter the required details.
    *   To enable it for an existing vendor, select the required vendor and click **Edit** at the top of the vendor’s _Details_ page.
*   In the _Other Details_ section, enable **Apply Withholding VAT for this vendor**.
*   Click **Save**.

Withholding VAT will be enabled for your vendor.

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## Create Invoices and Record Payment

When you create invoices with withholding VAT, your customer can deduct withholding VAT and pay the net amount.

To create an invoice with withholding VAT:

*   Go to _Sales_ on the left sidebar and select **Invoices**.
*   Click **\+ New** in the top right corner.
*   In the _New Invoice_ page, enter the required details.
*   Select the **7.5% withholding VAT** rate at the top of the item table.
*   In the _Items_ table, click the _More_ icon next to the line item and select **Show Additional Information** from the dropdown. Ensure that the **Deduct Withholding VAT** option is checked for the line item.
    *   To apply withholding VAT for all the line items, click **Bulk Actions** above the _Item Table_ and select **Bulk Update Line Items**, and then select **Apply Withholding VAT**.

![Apply Withholding VAT to Invoice](/en-ng/books/help/images/settings/withholding-vat/apply-wv-invoices.png)

*   Click **Save and Send** or **Save as Draft**.

To record payment for the invoice:

*   Open the invoice for which you want to record payment.
*   Click **Record Payment** at the top of the invoice’s details page.
*   Enter the required details.
*   Select **Yes** next to _Withholding VAT Deducted?_.
*   Enter the withholding certificate number in the **Reference#** field, if available.
*   Click **Record Payment**.

The payment will be recorded for the remaining invoice amount.

## View Customer Statements

Once you’ve recorded payment for your customer’s invoices, you can view the customer’s statement, which also includes the withholding VAT amount.

To view the customer statement:

*   Go to _Sales_ on the left sidebar and select **Customers**.
*   Select the customer for whom you want to view the statement.
*   In the customer’s _Details_ page, navigate to the **Statements** tab.

You can view the statements for the transactions, including payments recorded, payments received, and the VAT amount withheld by the customer.

Similarly, you can view statements for your vendors in the **Vendors** module.

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## Create Bills and Record Payment

If you are a withholding agent, you can create bills with withholding VAT and record the net payment.

To create a bill with withholding VAT:

*   Go to _Purchases_ on the left sidebar and select **Bills**.
*   Click **\+ New** in the top right corner.
*   In the _New Bill_ page, enter the required details.
*   Select the **7.5% withholding VAT** rate at the top of the item table.
*   In the _Items_ table, click the _More_ icon next to the line item and select **Show Additional Information** from the dropdown. Ensure that the **Deduct Withholding VAT** option is checked for the line item.
    *   To apply withholding VAT for all the line items, click **Bulk Actions** above the _Item Table_ and select **Bulk Update Line Items**, and then select **Apply Withholding VAT**.

![Apply Withholding VAT to Bill](/en-ng/books/help/images/settings/withholding-vat/apply-wv-bills.png)

*   Click **Save as Draft** or **Save as Open**.

To record payment for the bill:

*   Open the bill for which you want to record payment.
*   Click **Record Payment**.
*   Enter the required details.
*   Select **Yes** next to _Withholding VAT Deducted?_.
*   Enter the withholding certificate number in the **Reference#** field, if required.
*   Click **Save as Paid**.

The payment will be recorded for the remaining bill amount.

## View Withholding VAT Transactions

To view transactions where withholding VAT is applied:

*   Go to _Filing & Compliance_ on the left sidebar and select **VAT Returns**.
*   Open the required VAT return.
*   Review **Box 110**, which captures the withholding VAT transactions.

![View Withholding VAT Transactions](/en-ng/books/help/images/settings/withholding-vat/view-wv-transactions.png)

Click the amount in **Box 110** to view the underlying transactions where withholding VAT is applied.