Ad­vance tax rul­ings

Chronicle (Zimbabwe) - - Business -

AN Ad­vance Tax Rul­ing is a writ­ten state­ment is­sued by the Com­mis­sioner Gen­eral of Zimra re­gard­ing the in­ter­pre­ta­tion or ap­pli­ca­tion of any of the Acts spec­i­fied in the 1st Sched­ule of the Rev­enue Au­thor­ity Act which in­clude the In­come Tax Act the Cap­i­tal Gains Tax Act the Cus­toms and Ex­cise Act and the Value Added Tax Act Types of Ad­vance Tax Rul­ing 1. Bind­ing Gen­eral Rul­ing — This is an Ad­vance Tax Rul­ing that af­fects all tax­pay­ers. The Com­mis­sioner Gen­eral of Zimra can is­sue such rul­ing at any time and at his dis­cre­tion.

2. Bind­ing Pri­vate Rul­ing — This is an Ad­vance Tax Rul­ing is­sued in re­sponse to an ap­pli­ca­tion by a per­son re­gard­ing the ap­pli­ca­tion or in­ter­pre­ta­tion of the pro­vi­sions of any of the afore­men­tioned Acts in re­spect of a pro­posed trans­ac­tion as it af­fects the ap­pli­cant alone.

3. Bind­ing Class Rul­ing — This is an Ad­vance Tax Rul­ing is­sued in re­sponse to an ap­pli­ca­tion by a per­son re­gard­ing the ap­pli­ca­tion or in­ter­pre­ta­tion of the pro­vi­sions of any of the afore­men­tioned Acts as it af­fects a spe­cific class of per­sons.

4. Non-bind­ing Pri­vate Opin­ion — This is a state­ment is­sued by the Com­mis­sioner Gen­eral in re­sponse to an in­quiry by a per­son in or­der to pro­vide the per­son with in­for­mal guid­ance in re­spect of the tax treat­ment of a par­tic­u­lar set of facts and cir­cum­stances or trans­ac­tion, but which does not have any bind­ing ef­fect.

It should be noted that any de­ci­sions or com­mu­ni­ca­tion is­sued by the Com­mis­sioner Gen­eral of Zimra to clients in re­sponse to inquiries made by the clients, which do not fall within the cat­e­gories 1 to 3 above, are clas­si­fied as non-bind­ing pri­vate opin­ions. Ben­e­fits of an Ad­vance Tax Rul­ing An Ad­vance Tax Rul­ing is meant to pro­mote con­sis­tency, clar­ity and cer­tainty in the in­ter­pre­ta­tion and ap­pli­ca­tion of the tax law. It also as­sists clients in con­firm­ing the tax con­se­quences of pro­posed trans­ac­tions and pro­motes vol­un­tary com­pli­ance by as­sist­ing them to com­ply with tax laws. Ad­vance Tax Rul­ings are also ben­e­fi­cial in con­tract ne­go­ti­a­tion as they en­able each ne­go­ti­at­ing party to un­der­stand tax obli­ga­tions and con­ces­sions ap­pli­ca­ble to them to avoid con­fu­sion or con­flict be­tween the con­tract­ing par­ties re­lat­ing to the tax im­pli­ca­tions of their trans­ac­tions. How to Ap­ply for an Ad­vance Tax Rul­ing A client who re­quires a rul­ing should

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