An Omani establishment has drawn an invoice of OMR 27,000 on account of a foreign sub-contractor. The amount payable to the foreign sub-contractor is OMR 27,000. The WHT is Payable... An Omani establishment has drawn an invoice of OMR 27,000 on account of a foreign sub-contractor. The amount payable to the foreign sub-contractor is OMR 27,000. The WHT is Payable @ 10%. Determine the total amount payable to the foreign establishment and the amount of WHT.
Understand the Problem
The question describes a scenario where an Omani establishment needs to pay a foreign sub-contractor OMR 27,000 and is subject to a 10% withholding tax (WHT). The question requires calculating the total amount the Omani establishment needs to pay, considering both the payment to the sub-contractor and the WHT amount.
Answer
Total payable: OMR 24,300; WHT: OMR 2,700.
The total amount payable to the foreign establishment is OMR 24,300 and the amount of WHT is OMR 2,700.
Answer for screen readers
The total amount payable to the foreign establishment is OMR 24,300 and the amount of WHT is OMR 2,700.
More Information
Withholding Tax (WHT) is a type of income tax that is withheld from payments made to individuals or entities. In this case, the Omani establishment is required to withhold 10% of the payment to the foreign sub-contractor and remit it to the Omani tax authorities.
Tips
A common mistake is to calculate the WHT on the net amount instead of the gross amount. Ensure that the WHT is calculated on the gross amount of OMR 27,000.
Sources
- Withholding Tax on Payable Invoices - Accounting - help.financialforce.com
- Global tax guide to doing business in Oman - Dentons - dentons.com
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