Deducted Tax is useful in situations where you have to withhold the tax before paying the vendor. Deducted Taxes are computed on Items Total and are deducted from the Total.
For example, in Spain, IRPF tax is applied to self-employed individuals. Clients deduct the Tax before paying these individuals. The deducted tax value specified in the settings can be changed individually in the record.
To know more about Tax Management, click here.