---
title: "Withholding Taxes"
slug: "1611676960"
updated: 2026-07-06T14:12:23Z
published: 2026-07-06T14:12:23Z
canonical: "help.ila.cegid.com/1611676960"
---

> ## Documentation Index
> Fetch the complete documentation index at: https://help.ila.cegid.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Withholding Taxes

The tax withholding is the way in which the State **collects part of the payable due by tax payers amount in advance**. A representative example is the IRS (Personal Income Tax). The State generally imposes this type of withholdings to avoid the **accumulation of tax** due throughout the year, to avoid **non-payment of taxes**.

---

## Legal framework

The withheld tax must be paid for the **service provided by the entity** (in most cases, individual service providers), and is deducted when the customer makes the payment. This means that the issued invoice can specify the value being withheld by the customer, without affecting the invoice total amount.

If the document being used is the Cash Invoice, the withheld amount will affect the total being received by the service provider.

---

## Setting up withholdings

To specify the withholding on the issued documents, you must **associate** to the customer **the applicable withholding scheme** and the **correct withholding rate** for the services provided.

To setup the withholdings in sales, follow these steps:

**Step 1: Setting up the service withholding schemes**

Access **Taxes | Setup Withholding Taxes | Item WHT Schemas** and check if the desired scheme has the correct Withholding Rate code.

[![](https://helpcenter.ila.cegid.com/wp-content/uploads/Retencoes-Etapa1-Criar-Tipo-de-Retencao-1-1030x170.png)](https://helpcenter.ila.cegid.com/wp-content/uploads/Retencoes-Etapa1-Criar-Tipo-de-Retencao-1.png)

**Step 2: Setting up the withholding schemes**

Access **Taxes | Setup WithholdingTaxes** | **Party WHT Schemas** and check if the desired scheme has the same item withholding tax schema (configured in step 1).

[![](https://helpcenter.ila.cegid.com/wp-content/uploads/Retencoes-Etapa2-Criar-codigo-de-Retencao-1-1030x256.png)](https://helpcenter.ila.cegid.com/wp-content/uploads/Retencoes-Etapa2-Criar-codigo-de-Retencao-1.png)

**Step 3: Associating the service withholding to the sales item**

Access the item file you wish to withhold in **Customers and Items** | **Sales Items** and on the tab **Sales** associate the **Item WHT Schema** (configured in step 1).

[![](https://helpcenter.ila.cegid.com/wp-content/uploads/Retencoes-Etapa3-Regime-de-Retencao-1.png)](https://helpcenter.ila.cegid.com/wp-content/uploads/Retencoes-Etapa3-Regime-de-Retencao-1.png)

**Step 4: Associating the withholding tax schema to the customer**

Access the entity file in **Customers and Items** | **Customers** and on the tab **Customer** associate the **Item WHT Schema** (configured on step 2).

After performing the association, every time you issue a document to the set up customer, the withholding will be performed on the items with the corresponding rates.

[![](https://helpcenter.ila.cegid.com/wp-content/uploads/Retencoes-Etapa4-Regime-de-Retencao-Entidade-1.png)](https://helpcenter.ila.cegid.com/wp-content/uploads/Retencoes-Etapa4-Regime-de-Retencao-Entidade-1.png)

---

## Manually configuring new withholding tax types

Tax withholding is a Portuguese fiscal measure that works as an advance payment or as a payment in installments of taxes owed to the State. The **IRC Tax Withholding is automatically setup** by the system. However, it is possible to manually set up the new withholding types.

To setup new withholding types, follow these steps:

**Step 1: Creating the Withholding Type**

1. Access **Taxes | Setup Withholding Taxes | WTH Types**;
2. Click **Create**;
3. Fill in the fields according to the image presented;
4. Click **Save. ![](https://helpcenter.ila.cegid.com/wp-content/uploads/Retencoes-Etapa1-Criar-Tipo-de-Retencao.png)**

**Step 2: Creating the Withholding Code**

1. Access **Taxes | Setup Withholding Taxes | WTH Codes**;
2. Click **Create**;
3. Fill in the fields according to the image presented;
4. Click **Save**. ![](https://helpcenter.ila.cegid.com/wp-content/uploads/Retencoes-Etapa2-Criar-codigo-de-Retencao.png)

**Step 3: Creating the Item Withholding Schema**

1. Access **Taxes | Setup Withholding Taxes | Item WHT Schemas;**
2. Click **Create**;
3. Fill in the fields according to the image presented;
4. Click **Save**. ![](https://helpcenter.ila.cegid.com/wp-content/uploads/Retencoes-Etapa3-Regime-de-Retencao.png)

**Step 4: Creating the Party Withholding Schemas**

1. Access **Taxes | Setup Withholding Taxes | Party WTH Schemas**;
2. Click **Create**;
3. Fill in the fields according to the image presented;
4. Click **Save.** **![](https://helpcenter.ila.cegid.com/wp-content/uploads/Retencoes-Etapa4-Regime-de-Retencao-Entidade.png)**

**Step 5: Associating the Customer and Item Withholding Schema**

**Customers**

1. Access **Customers and Items | Customers;**
2. Select the customer file you wish to associate this scheme;
3. On the tab **Customer,** fill in the field **Withholding Type** with **IRC;**
4. Click **Save.**

**Note:** If you wish that all customers have this scheme associated, you can mark this option as default. For that, access **Setup | Documents | Customer Groups**, select **the default groups** and on the field **Party Withholding Tax Schema** select **IRC**.

**Items**

1. Access **Customers and Items | Sales Items;**
2. Select the file of the desired item;
3. On the tab **Sales,** fill in the field **Withholding Tax Type** with **SERVICOSIRC**;
4. Click **Save**.