## Documentation Index

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

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

# Withholding Tax

Under the Singapore Income Tax Act, a payer must withhold tax on specific type of payments made to non-resident companies or individuals and remit it to the Inland Revenue Authority of Singapore (IRAS). This withholding tax must be filed and paid by the 15th of the second month following the date of payment. In Zoho Books, you can now record withholding tax directly when creating transactions.

## Enable Withholding Tax

Before deducting withholding tax from your transactions, you need to enable it. Here’s how:

*   Go to **Settings** in the top right corner.
    
*   Select **Taxes** under _Taxes and Compliance_.
    
*   Navigate to **Withholding Tax Settings**.
    
*   Click **Enable Withholding Tax**.
    
*   You can select if you want to _Enable Withholding Tax For_ **Customers and Vendors**, **Vendors** or **Customers**.
    
*   You can enable the **Enable Withholding Tax Override for sales transactions** option if you want to withhold tax on sales transactions and manually override the withholding tax amount.
    
*   You can enable the **Enable Withholding Tax Override for purchases transactions** option if you want to withhold tax on purchase transactions and manually override the withholding tax amount.
    
*   To round off the withholding tax at either the transaction level or line item level, click the dropdown next to _Round Off Withholding Tax_ and select your preferred option.
    
*   Click **Save**.
    
    ![Enable Withholding Tax](/en-sg/books/help/images/settings/withholding-tax/enable-wht.png)

Withholding tax will now be enabled for your organisation.

## Enable Withholding Tax for Customers or Vendors

To create and enable withholding tax for a customer:

*   Go to _Sales_ on the left sidebar and select **Customers**.
    
*   Click **\+ New** in the top right corner of the page.
    
*   Enter all the required and mandatory details on the _New Customer_ page.
    
*   In the _Other Details_ section, check the **Enable Withholding Tax for this Customer** option.
    
*   Click **Save**.
    
    ![Customer Tax](/en-sg/books/help/images/settings/withholding-tax/customer-wht.png)

Withholding tax will now be enabled for this customer.

To create and enable withholding tax for a vendor:

*   Go to _Purchases_ on the left sidebar and select **Vendors**.
*   Click \*\*+ New \*\*in the top right corner of the page.
*   Enter all the required and mandatory details on the _New Vendor_ page.
*   In the _Other Details_ section:
    *   Check the **Enable Withholding Tax for this Vendor** option.
    *   Select the required **Withholding Tax Rate (%)**.

**Note:**

The **Withholding Tax Rate** you select here will be auto-populated in the bills of the vendor.

*   Click **Save**.
    
    ![Vendor Tax](/en-sg/books/help/images/settings/withholding-tax/vendor-wht.png)

Withholding tax will now be enabled for this vendor.

## Create Transactions and Record Payments

You can create invoices and bills, and deduct withholding tax on them. Here’s how:

*   Go to _Sales_ on the left sidebar and select **Invoices**.
*   Click **\+ New** in the top-right corner of the page.
*   In the _New Invoice_ page, enter all the mandatory and required details.
*   Select the **Apply Withholding Tax** option for the individual line items you want to withhold tax on in the item table.

**Note:**

The **Apply Withholding Tax** option will appear only if withholding tax is enabled for the customer or vendor.

*   Select the **Withholding Tax** rate you want to apply to your transaction.
    
*   You can view the total withholding tax deducted for the transaction in the _Total Withholding Tax Amount_ section.
    
*   Click **Save and Send** or click the dropdown next to it to **Save and Print**, **Save and Share**, or **Save and Send Later**.
    
    ![Transaction Tax](/en-sg/books/help/images/settings/withholding-tax/transaction-wht.png)

Similarly, you can create bills for your vendors and deduct withholding tax.

**Note:**

The withholding tax deduction will not be applied to the total invoice amount and will not impact any accounts directly. It can only be recorded at the time of payment.