Tax Retentions
The Tax Retentions catalog is where you define each withholding your company applies when paying a vendor: income-tax withholding or VAT/sales-tax withholding, with its fixed percentage. Instead of handing that percentage to the vendor, your company withholds it and remits it directly to the tax authority.
This screen manages the individual withholdings, using the same form as the Taxes catalog but documented on its own. To apply several withholdings together in a single selection (for example income tax plus VAT withholding at once), combine them into a Tax Retention Group, which is managed in its own module.
What it is and what it's for
In many countries, when you pay a vendor your company is required to "withhold" part of the payment and remit it directly to the tax authority instead of handing it over to the vendor. Each record in this catalog represents one of those withholdings, with its percentage and its calculation type: VAT/sales tax or Income Tax.
Unlike the Taxes catalog (which offers several types: VAT, excise, legal tip, customs, etc.), here you can only choose between these two types, because they define how AdmCloud calculates the withheld amount: if the withholding is of the VAT type, it's calculated on the line's tax (VAT/sales tax) amount; if it's of the Income Tax type, it's calculated on the line's amount (income).
The withholdings you create here aren't picked directly on your purchase documents; you first need to combine them into one or more Tax Retention Groups, and it's that group you select (or pre-assign on the Vendor record) when recording Vendor Bills, Expenses, Vendor Credit and Debit Notes, Receptions and other purchase documents.
Screens in this area
| Screen | What it does |
|---|---|
| List | Shows your withholdings with their name, percentage and retention type, split into Active and Inactive tabs. From here you add a new one or open one to view or edit it. |
| New Withholding / Edit Withholding | Form to capture the name, percentage, retention type and ledger accounts. The percentage and the retention type can only be set when the record is created; once saved, they can no longer be changed. |
| Details | Read-only view with the withholding's full configuration, including the Tax Retention Groups it's part of, with shortcuts to edit or delete it. |
How to create a tax withholding
- Open the Tax Retentions module and click Add.
- Enter a descriptive Name (for example "Income Tax 10%" or "VAT Withholding 30%"). The name is required and must be unique: it cannot repeat another withholding or an existing tax.
- Enter the withholding's Percentage. Double-check it: once the record is saved, the percentage can no longer be changed.
- Select the Retention Type: VAT/sales tax or Income Tax. This field is required and, like the percentage, cannot be changed after the withholding is created.
- If needed, assign the Sales Tax Account and the Purchase Tax Account where the withheld amount will be posted. Both must be in the same currency as your company.
- Add any internal Notes you need and click Save.
- Repeat this process for each withholding you need and, once they're all created, open the Tax Retention Groups module to combine them into the group or groups you'll use on your purchases.
Key capabilities
- Two calculation types: VAT (calculated on the line's tax amount) or Income Tax (calculated on the line's amount/income).
- Dedicated posting: each withholding can post its amount to the sales or purchase ledger account you assign it.
- Configurable calculation base (VAT withholdings): for a VAT-type withholding, once created you can choose whether the percentage is calculated on the Tax Amount or on the line's Gross Amount (before taxes and withholdings).
- Reusable across groups: the same individual withholding can be part of several different Tax Retention Groups.
- Used across the whole purchase cycle: through the groups that include it, the withholding can be applied on Vendor Bills, Expenses, Vendor Credit and Debit Notes, Receptions and other purchase documents.
- Active and inactive: mark a withholding as inactive to stop offering it in new groups, without losing the history of transactions that already used it.
Key fields
| Field | What it's for |
|---|---|
| Name | Descriptive name of the withholding. Required and unique against all the company's withholdings and taxes. |
| Fiscal Name and Code | Extra identifiers used by some of your country's fiscal reports and receipts. |
| Percentage | Withholding rate applied on its calculation base. Cannot be modified once the record is created; supports up to 4 decimals for withholdings with very specific rates. |
| Retention Type | VAT/sales tax or Income Tax; determines whether the calculation is done on the tax or on the line's amount. Cannot be modified once the record is created. |
| Retention Tax Base | Only applies to VAT-type withholdings and only shows when editing an existing one: defines whether the percentage is calculated on the Tax Amount or on the line's Gross Amount. |
| Sales Tax Account | Ledger account where the withheld amount on your sales is posted, if assigned. |
| Purchase Tax Account | Ledger account where the withheld amount on your purchases is posted, if assigned. |
| Notes | Free text for internal remarks about the withholding. |
| Inactive | Hides the withholding when creating new groups, while keeping its existing history. |
Note: unlike the Taxes catalog, Tax Retentions do not offer cash-regime Transfer Accounts; those accounts do not apply to withholdings.
Validations when saving
- The name is required and must be unique, both among withholdings and against the taxes already registered.
- The percentage cannot be negative.
- The percentage and the retention type cannot be changed once the record is created; if you made a mistake, you'll need to create a new withholding.
- The sales and purchase tax accounts, if assigned, must exist and be in the same currency as your company; otherwise AdmCloud rejects the save.
- A withholding cannot be deleted while it's included in a Tax Retention Group, assigned to an Item, or used on a line of an existing transaction; you must remove it from those places first.
Availability and permissions
- Access to this module is controlled by the "Taxes" (SA_TAXES) permission on your user group, with separate levels for viewing, adding, editing and deleting.
- For withholdings (through their groups) to show up on your purchase documents, your company must have the "Purchases Retention Application" preference (under Company Preferences) set to Bill, Payment, or both.
Tips and common issues
Need to apply several withholdings at once to a vendor? Create each withholding separately here and then combine them into a Tax Retention Group: that way you apply them all at once on your purchases, instead of picking them one by one.
Can't change the percentage or type of an existing withholding? That's intentional: both stay fixed so they don't alter the history of transactions and groups that already use that withholding. Create a new withholding with the correct percentage or type and, if it applies, mark the old one as Inactive.
Can't delete a withholding? AdmCloud blocks it if it's still part of a Tax Retention Group, assigned to an Item, or if it appears on any existing transaction. In that case, it's safer to deactivate it (mark it as Inactive) instead of trying to delete it.
Looking to group several withholdings to apply them together on your purchases? That's done in the Tax Retention Groups module, not in this catalog. Here you only create and maintain each individual withholding.