For certain services the seller does not collect all of the VAT; a set share is declared directly by the buyer. It is half for catering, nine tenths for cleaning and seven tenths for contract textile work. Since the party issuing the invoice never collects the withheld part, the customer’s debt cannot be the grand total.
When you pick the code from the withholding box on the invoice, the rate arrives on its own. The rate is a suggestion and you can type over it if the nature of the work calls for it. The program separates the withheld VAT and debits the customer only for the amount payable; the grand total, the withheld VAT and the amount payable each appear on the document.
When the filing period comes, the Withholding Sales report sets out how much VAT was withheld on which invoice. If you issued invoices in foreign currency, the report converts the amounts into the company’s currency at each document’s own rate, so there is no separate calculation to do.