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+--- Thread: withholding tax on importation (/showthread.php?tid=7300)
withholding tax on importation - oitarich - 01-31-2010
What is the accounting treatment of withholding tax paid as an advance tax on importation of goods and assuming that the income tax payable for the period is less than the advance tax paid. How would it be presented in the balance sheet and cashflow statement.
Does it fall under income tax paid or it forms part of working capital changes in the cashflow statement assuming it is taken as acurrent asset in the balance sheet?.
Richard Oita
- madnanirshad - 02-03-2010
Dear Mr. Richard Oita
i am simply a commerce graduate but i am trying to comment on your question but you must have to verify it from your senior.
Enteries
-----------------------------
Entery at the time of import
(Current Asset) Advance tax on import DR. XXXX
(Current Asset) Bank Cr.XXXX
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Entery at the year end
(Expense) Taxation Dr. XXXX
(Current Asset) Advance Tax on import. Cr. XXXX
----------------------------
Treatment in balance sheet
With holding tax will be shown in balance sheet in current Assets(Asset>Current Asset> Loan, Advances and prepayments>With holding tax.
---------------------------------------------
Treatment in cash Flow
it will reduce the figure of Loan and advance under the head working capital.
if any one senior is there, please comment on it.
i would be grateful for this
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by oitarich</i>
<br />What is the accounting treatment of withholding tax paid as an advance tax on importation of goods and assuming that the income tax payable for the period is less than the advance tax paid. How would it be presented in the balance sheet and cashflow statement.
Does it fall under income tax paid or it forms part of working capital changes in the cashflow statement assuming it is taken as acurrent asset in the balance sheet?.
Richard Oita
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">