Record Egyptian withholding tax

This page applies only to organisations whose country is Egypt. Kluvan works the same everywhere without it.

In Egypt, a customer may pay you less than the invoice and withhold the rest as tax, and you may do the same when you pay a supplier. Books records the full amount settled against the invoice or bill, moves only the net amount through the bank, and keeps the withheld tax in its own register.

Before you start

• Your organisation's country must be Egypt.
• A withholding tax code must exist in Books → Tax codes. It needs its own tax-receivable and tax-payable accounts, a start date and the rate your accountant gives you. Books has no default withholding rate, threshold or exemption. If you see no withholding code, ask your accountant to set one up before you continue.
• To record receipts you need the Books right Manage sales documents and payments; to pay suppliers, Manage purchases and payments.

Steps

Tax a customer withheld

1. Open Books → Receipt and choose the customer.
2. In Amount, enter the gross amount the payment settles: the cash received plus the tax withheld.
3. In Withholding tax, choose the withholding code.
4. In Withholding basis, enter the amount the withholding applies to.
5. Apply the receipt to the invoices under Apply to invoices and select Save · Receipt.

Books works out the tax withheld once, reduces the bank amount by it and settles the customer's invoices with the gross amount. The saved receipt shows Tax withheld and the net amount.

Tax you withheld from a supplier

6. Open Books → Pay supplier and choose the supplier.
7. Enter the gross amount settled, then choose the Withholding tax code and the Withholding basis, as above.
8. Save the payment. The bank pays the net amount and the withheld tax goes to your tax-payable account.

See the register

9. Open Books → VAT return → Withholding tax.
10. Choose the Month and the Direction: Money in for tax customers withheld, Money out for tax you withheld. Select Show.
11. Each line shows the payment number, date, code, Withholding basis and Tax withheld. Under Download this page, choose CSV or Excel for your accountant.

Good to know

• The register is for your records and your accountant. It is not the tax authority's Form 41, a withholding certificate or a remittance filing, and Kluvan sends nothing to the tax authority.
• Books does not decide whether withholding applies, its basis, foreign-party rules or treaty treatment. Your accountant confirms the rate, basis and any exemption.
• A withholding entered by hand as a journal is not added to the register.
• A payment where all of the amount is withheld, and withholding on an expense entered in Books → Expense, are not supported.
• Withholding codes cannot be chosen on invoices or bills; they appear only on receipts and supplier payments.
• To prepare the VAT return, see Prepare the Egyptian VAT return.