Tax­a­tion of mo­tor­ing ben­e­fits

Chronicle (Zimbabwe) - - Opinion -

A MO­TOR­ING ben­e­fit, which an em­ployer may of­fer to an em­ployee for us­age of a mo­tor ve­hi­cle as part of the em­ployee’s con­di­tions of em­ploy­ment, is li­able to Pay As You Earn (PAYE). The mo­tor­ing ben­e­fit granted in this case con­sti­tutes re­mu­ner­a­tion and should be sub­jected to PAYE in terms of the In­come Tax Act {Chap­ter 23:06]. based on en­gine ca­pac­ity of the ve­hi­cle and are not sub­ject to ap­por­tion­ment be­tween busi­ness and pri­vate us­age of the ve­hi­cle al­lo­cated to the em­ployee. The ben­e­fit is, how­ever, re­duced pro­por­tion­ally if the em­ployee uses the ve­hi­cle for only part of the tax year.

Deemed val­ues The fol­low­ing are the deemed ben­e­fits for the pur­pose of cal­cu­lat­ing PAYE:

It should be noted that where the em­ployer is reg­is­tered for Value Added Tax (VAT), the mo­tor ve­hi­cle ben­e­fit con­sti­tutes a tax­able sup­ply and should be in­cluded on the VAT 7 re­turn for the re­spec­tive pe­riod. Re­minder for Pay­ment of Tax Our val­ued clients are re­minded that the PAYE for the month of Oc­to­ber is due on or be­fore Novem­ber 10, 2016.

Dis­claimer This ar­ti­cle was com­piled by the Zim­babwe Rev­enue Au­thor­ity for in­for­ma­tion pur­poses only. ZIMRA shall not ac­cept re­spon­si­bil­ity for loss or dam­age aris­ing from use of ma­te­rial in this ar­ti­cle and no li­a­bil­ity will at­tach to the Zim­babwe Rev­enue Au­thor­ity.

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