Response to the following problem:
Our overseasincome is taxable based on statutory tax regulations. For example the royalty income that we collect from Franchisee in Haiti is taxable at Haitianrate and payable tolocal Tax authorities. We asked Franchisees to pay those taxes on our behalf and deduct the amount from the royalty payable tous. The Franchisee should submit a proof of payment (any receipts, taxforms etc).
What's the accounting treatment for the international royalty income and taxes wethheld?