## Zoho Inventory Documentation Index

Access the complete documentation index at:
https://www.zoho.com/en-ng/inventory/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 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.