Overview

This Odoo module enables suppliers to record Withholding VAT (WVAT) that has been applied by their customers on invoices. In Kenya, customers are required to withhold 2% VAT on certain transactions and remit it directly to the Kenya Revenue Authority (KRA). This module helps suppliers track these withholdings and maintain proper accounting records.

Features

✅ Automated Journal Entries

• Automatically creates journal entries for customer-applied withholding VAT
• Debits WHT VAT Receivable account and credits Accounts Receivable
• Maintains proper audit trail with linked entries

✅ Smart Reconciliation

• Automatically attempts to reconcile withholding entries with original invoices
• Reduces manual reconciliation work
• Maintains clear payment tracking

✅ Certificate Management

• Track WVAT certificate numbers and dates
• Store certificate information for compliance and audit purposes
• Link certificates to specific invoices

✅ Flexible Configuration

• Configurable withholding rate (defaults to 2%)
• User-editable withholding amounts for special cases
• Customizable accounts and journals

✅ User-Friendly Interface

• Easy-to-use wizard for recording withholdings
• Clear buttons and forms integrated into invoice views
• Comprehensive validation and error handling

How It Works

The module follows Kenya's VAT withholding regulations where customers withhold 2% VAT on qualifying transactions:

Step 1: Customer Invoice Posted

When you post a customer invoice, the system makes it eligible for withholding VAT recording.

Step 2: Record Withholding

Use the "Record Customer WHT VAT" button to open the withholding wizard:

• Base Amount: Defaults to invoice untaxed amount (editable)
• Rate: Defaults to 2% (editable)
• Withheld Amount: Auto-calculated but can be manually overridden
• Accounts: WHT VAT Receivable and A/R accounts
• Certificate: Optional certificate number and date

Step 3: Automatic Processing

The system automatically:

• Creates a journal entry: Dr WHT VAT Receivable / Cr A/R
• Posts the entry with proper references
• Attempts to reconcile with the original invoice
• Links the entry back to the invoice
• Updates invoice status to show withholding applied

Step 4: View and Track

• View linked journal entries directly from invoices
• Track certificate information
• Monitor withholding status across all invoices

Accounting Flow

Original Invoice:

Dr  Accounts Receivable (Customer)    1,000.00
    Cr  Sales Revenue                           850.00
    Cr  VAT Output                             150.00

Withholding Entry (2% of base amount):

Dr  WHT VAT Receivable (KRA)           17.00
    Cr  Accounts Receivable (Customer)          17.00

Result:

• Customer owes: 1,000.00 - 17.00 = 983.00
• KRA owes supplier: 17.00 (recoverable)
• Proper audit trail maintained

Installation

Prerequisites:

• Odoo 17.0 or later
• account module (automatically installed)
• account_accountant module (automatically installed)

Installation Steps:

1. Download and Extract:

   # Place the module in your Odoo addons directory
   cp -r ke_withholding_vat_supplier /path/to/odoo/addons/
   

2. Update Apps List:

   • Go to Apps menu in Odoo
   • Click "Update Apps List"
   • Search for "Kenya Withholding VAT"

3. Install Module:

   • Click "Install" on the module
   • The system will automatically install dependencies

4. Configure Accounts:

   • Go to Accounting > Configuration > Chart of Accounts
   • Create or configure "WHT VAT Receivable" account
   • Ensure proper account types are set

Configuration

Required Setup:

1. Chart of Accounts:

   Create or verify these accounts exist:

   • WHT VAT Receivable: Asset account for tracking VAT withheld by customers
   • Accounts Receivable: Standard customer receivable account

2. Journals:

   Ensure you have a General Journal for posting withholding entries.

3. User Permissions:

   Users need:

   • Accounting: Billing access (to see invoices)
   • Accounting: Show Full Accounting Features (to post entries)

Optional Configuration:

• Default Rate: Modify the default 2% rate in the wizard if needed
• Account Naming: The system auto-detects "Withholding VAT Receivable" accounts
• Journal Selection: Configure which journals can be used for withholding entries

Usage Guide

Recording Withholding VAT:

1. Navigate to Invoice:
   • Go to Accounting > Customers > Invoices
   • Open a posted customer invoice
2. Start Withholding Process:
   • Click "Record Customer WHT VAT" button (only visible on posted invoices)
   • The withholding wizard opens
3. Configure Withholding:
   • Base Amount: Verify or adjust the taxable base
   • Rate: Confirm the withholding rate (usually 2%)
   • Amount: Review calculated amount (can be manually edited)
   • Accounts: Select appropriate WHT VAT Receivable account
   • Journal: Choose the journal for posting
   • Certificate: Enter certificate details if available
4. Apply Withholding:
   • Click "Apply" to create and post the journal entry
   • The system opens the created entry for review

Viewing Withholding Information:

1. From Invoice:
   • "Customer Withholding VAT" tab shows withholding status
   • "View Customer WHT VAT Entry" button opens linked journal entry
   • Certificate information is displayed
2. From Journal Entries:
   • Navigate to Accounting > Accounting > Journal Entries
   • Filter by withholding-related references
   • View reconciliation status

Reporting and Compliance:

• Use standard Odoo reports filtered by WHT VAT Receivable account
• Export certificate information for KRA submissions
• Track withholding trends through partner statements

Troubleshooting

Common Issues:

"No WHT VAT Receivable account found"

• Create an account with "Withholding VAT Receivable" in the name
• Or manually select the correct account in the wizard

"Cannot reconcile entries"

• Check that both entries use the same partner and account
• Verify amounts and currencies match
• Manual reconciliation may be needed for complex cases

"Button not visible on invoice"

• Ensure invoice is posted (not draft)
• Verify invoice type is customer invoice or refund
• Check that withholding hasn't already been applied

"Permission denied when posting"

• Ensure user has accounting posting rights
• The module uses sudo() for posting to avoid permission issues
• Contact system administrator if issues persist

Performance Considerations:

• Large numbers of withholding entries are handled efficiently
• Reconciliation is attempted automatically but may need manual intervention
• Regular cleanup of old reconciled entries improves performance

Support and Maintenance

Technical Support:

• Email: support@odoo.co.ke
• Website: https://odoo.co.ke

Updates and Patches:

• Regular updates available through standard Odoo update mechanisms
• Backup your database before applying updates
• Test in staging environment first

Customization:

• Module is designed to be easily customizable
• Contact Metro ICT Ltd for custom modifications
• Follow Odoo development guidelines for modifications

Legal and Compliance

Kenya VAT Regulations:

• This module helps comply with Kenya VAT withholding requirements
• Users are responsible for ensuring compliance with current regulations
• Consult with tax advisors for specific compliance requirements

Data Privacy:

• Module follows Odoo's standard data handling practices
• Certificate and withholding data is stored securely
• Regular backups recommended for audit trail preservation

Disclaimer:

• This module is provided as-is for accounting convenience
• Users are responsible for verifying calculations and compliance
• Always consult with qualified tax professionals

Version Information

Change Log:

• v17.0.1.0.0: Initial release for Odoo 17 - Core withholding VAT functionality - Automated journal entry creation - Certificate tracking - Smart reconciliation - User-friendly wizard interface

Contributing

We welcome contributions to improve this module:

1. Bug Reports: Submit detailed bug reports with steps to reproduce
2. Feature Requests: Suggest new features that would benefit users
3. Code Contributions: Follow Odoo development guidelines
4. Documentation: Help improve this documentation

Development Setup:

• Fork the repository
• Create feature branches
• Submit pull requests with clear descriptions
• Include tests for new functionality

Contact Information

Metro ICT Ltd

• Website: https://odoo.co.ke
• Support: support@odoo.co.ke
• Location: Kenya

Business Hours:

• Monday - Friday: 8:00 AM - 6:00 PM EAT
• Saturday: 9:00 AM - 1:00 PM EAT
• Emergency Support: Available for critical issues

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This module is designed specifically for the Kenyan market and VAT regulations. For use in other jurisdictions, please consult local tax requirements and modify accordingly.