Withholding Tax - Vendor

I'm here to help record the bill with a withholding tax you've received from a supplier, Tim.

You can start by creating a liability account to track the balance due from the supplier's bill and the tax amount deducted. 

 Here's how:

1. Click Accounting on the left panel, and then select Chart of Accounts.
2. Click the New button.
3. From the Account Type drop-down, select Current liabilities.
4. From the Detail Type drop-down, select Other current liabilities.
5. In the Name field, enter "Tax on supplier's behalf".
6. Click Save and close.
    

Create a bill to record the invoice you receive from the supplier. Then, make sure to add the liability account you've created above and enter a negative amount (-100).

After that, pay the bill (900.00). Then, create an Expense transaction to record the portion of the tax on the supplier's behalf to the tax authority. See the attached screenshot below for your visual guide.

Additionally, I've added an article that'll help you account for a withholding tax deduction on a customer invoice. This way, you'll be able to record the details accurately: How do I Record Tax Withheld by my Customer?.

Let me know if there's anything else you need about recording the tax withheld from the supplier's invoice. I'm always around to help you.