Withholding VAT
Under the Nigeria Finance Act, a payer must withhold VAT at source on specific type of payments and remit it to Federal Inland Revenue Service (FIRS) by the 21st of the following month. In Zoho Inventory, you can now record withholding VAT directly when you create transactions.
Enable Withholding VAT
To deduct withholding VAT in your transactions, you must first enable it in your organization. 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.
- You can choose if you want to Enable Withholding VAT For Customers and Vendors, Customers, or Vendors.
- Click Save.
Withholding VAT will now be enabled for your organization.
Enable Withholding VAT for Customers and Vendors
To enable withholding VAT for a customer:
- Go to Sales on the left sidebar and select Customers.
- Select the customer for whom you want to enable withholding VAT.
- In the details page, click Edit at the top.
- In the Edit Customer page, under Other Details, enable Apply Withholding VAT for this customer.
- Make other required changes.
- Click Save.
Withholding VAT will be enabled for your customer. Similarly, you can also enable withholding VAT for a vendor.
Create Transactions
You can create invoices and bills, and deduct withholding VAT on them. Here’s how:
- 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.
- Click Save and Send, or Save as Draft and send it later.
The invoice will be recorded, along with the withholding VAT details. Similarly, you can also record bills and deduct withholding VAT.