Quarterly Payment dates – QPDs

Most people shy away from registering with ZIMRA for fear of paying taxes. In as much as businesses which are registered with ZIMRA are liable to pay taxes, it is important to note that it is the obligation of all businesses to pay taxes and failure to do so would be a breach of law in terms of the Income tax Act. Most people also have the misconception that once you are registered with ZIMRA you are now supposed to pay taxes whether you make a profit or not. Contrary to this widely accepted notion, that is not the case. Tax is charged on profits and therefore if you are not trading or if you are not making any profit there is no tax that is paid by your company.

Another misconception is that tax is paid all at once to ZIMRA. However this again is false. Did you know that tax is not paid all at once? Yes, contrary to most perceptions, tax is actually paid in bits as the year progresses. Tax is paid in percentages throughout the year on what are referred to as quarterly payment dates (QPDs).

What are QPDs?

QPDs are quarterly payment dates and these are the dates throughout the year on which tax is paid. Tax is paid provisionally and the provisional Tax payable is based on the respective estimated annual tax due. The ITF 12B form, which is a return for provisional tax payments, has to be completed in respect of these payments.
The quarterly payment dates and the percentage of tax due for each tax year are as follows.
1st QPD -25th March-10%
2nd QPD – 25th June -25%
3rd QPD- 25th September -30%
4th QPD-20th December -35%
Do not fear ZIMRA registration, stay compliant and avoid breaching the law. Contact Sabarm today and let us handle all the tax issues while you focus on running your business.

Is a Tax Invoice necessary in Zimbabwe?

Tax invoices are very important in Value added tax. However, not all receipts are tax invoices. A tax invoice is a legal document that a seller submits to a customer in which the tax is included. A registered operator who supplies taxable goods/services is required to issue the recipient with a tax invoice/fiscal tax invoice within 30 days from the date of such supply.

 

Did you know that it is illegal to issue more than one tax invoice for each taxable supply? If a customer loses the original tax invoice, the supplier may provide a copy clearly marked “copy”. Do not breach the law as the punishment is severe.
For VAT purposes, not all invoices will be accepted by the Zimbabwe Revenue Authority as tax invoices?
Features of a valid tax invoice.
  • The words ‘Tax Invoice’ or ‘Fiscal Tax Invoice’ should be in a prominent place
  • Name, address & VAT Reg No. of the supplier
  • Name & address of the recipient &, if recipient is a registered operator, the VAT Reg No. of the recipient Serialized number & date on which the invoice is issued
  • Description of the goods or services supplied
  • Quantity/volume of the goods or services supplied
  • Value of supply, price charged or consideration of the supply
  • Any other words/phrases used under the fiscal recording regulations denoting an invoice used to account for taxable supplies
It is an offence for an unregistered operator to charge VAT in respect of any supplies made. You cannot add a VAT component on your price of goods/services if you are not registered for VAT. Anyone involved in such unlawful activity will be prosecuted for such an offence.
VAT is seen as a complicated area in tax but we simplify it for you. Let us worry about it while you focus on your business. Contact us today for this and more

company re-registration in Zimbabwe

 

Debunking Company re-registration

Did you know that all companies registered before 22 February 2020 are required by law to be re-registered in line with the new Companies and Other Business Entities Act ?

what is required for company re-registration

For company re-registration, a company has to be up to date with its annual returns. Annual returns are a statutory obligation in terms of the companies and other business entities Act and are filed every year with the registrar’s office. These are not to be confused with tax returns which are filed with the Zimbabwe Revenue Authority.

 

 

Why you need Tax Clearance certificate (ITF 263)

What is a tax clearance certificate?

As explained by Zimbabwe Revenue Authority (ZIMRA), A Tax Clearance Certificate (ITF 263) is a certificate issued by the Commissioner General of the Zimbabwe Revenue Authority (ZIMRA), to a person liable to pay tax, provided that the taxpayer’s tax position is satisfactory.

How can you get a tax clearance?

First of all one has to be registered with ZIMRA for a tax clearance to be issued.  Moreover, for a tax clearance to be issued, one’s tax affairs have to be in order, i.e. tax returns & tax payments will have to be up to date and if the taxpayer is under a payment plan, it has to be adhered to religiously.

what is the importance of a tax clearance?

Most people think that you can trade and go about you business without a tax clearance. While this may be true, failure to have a valid tax clearance means that your tax affairs are not in order and you are in contravention of the country’s tax laws. It is a statutory requirement for all traders have a valid tax clearance and failure to provide a valid tax clearance means 30% Withholding tax has to be withheld on any contract with such a trader. This withholding tax of 30% is on each contract and is largely punitive and so it is far better to have your tax affairs in order and pay your corporate taxes rather than paying withholding tax on your contracts.

Most people think that you can trade and go about your business without a tax clearance. While this may be true, failure to have a valid tax clearance means that your tax affairs are not in order and you are in contravention of the country’s tax laws.

  • It is a statutory requirement for all traders have a valid tax clearance and failure to provide a valid tax clearance means 30% Withholding tax has to be withheld on any contract with such a trader in terms of section 80 of the Income Tax Act. This withholding tax of 30% is on each contract and is largely punitive and so it is far better to have your tax affairs in order and pay your corporate taxes rather than paying withholding tax on your contracts.
  • A tax clearance is a requirement for the issuance and renewal of any operator’s licence in respect of the operation of any public service vehicle [Section 80A (2)]
  • A tax clearance is a requirement for the issuance and renewal of a licence in respect of any trade or business required to be licensed in terms of the Shop Licences Act [Chapter 14:17]
  • A tax clearance is a requirement for the issuance and renewal of a certificate of registration of a mining location under the Mines and Minerals Act [Chapter 21:05] to a miner.
  • A tax clearance is a requirement for the issuance and renewal of a licence to any person who owns, conducts or operates a designated tourist facility as defined in the Tourism Act [Chapter 14:20] or who provides or assists in providing any service which is such a designated tourist facility.

Avoid  the hassles associated with not having a valid tax clearance certificate. Contact Sabarm Today and let us give you peace of mind on all your tax issues.

 

 

 

Value Added Tax (VAT)

What is Value added Tax (VAT)?

Value added Tax (VAT) is a consumption tax that is assessed on products at each stage of the production process from labor and raw materials to the sale of the final product.

Output tax and input tax

Output tax is the VAT charged on the sale of goods &/services from your business, if its VAT-registered. Input tax is the VAT charged on the sale of goods & or services to your business, if its VAT-registered. VAT is calculated as the difference between the Output tax and the input tax.

Who is supposed to register for VAT?

It is not every business that is supposed to be registered for VAT. A trader is mandated to register for VAT if the value of taxable supplies exceeds or is expected to exceed the VAT threshold (ZWL $1 000 000) within a period of 12 months. Whenever the business reaches or anticipates to reach or exceed this threshold, it should register for VAT without fail or risk mandatory VAT registration which is normally punitive in nature due to backdating.

The requirements for VAT registration

For all VAT registration contact Sabarm today and get professional assistance at your convenience. The following are the requirements for VAT registration.