With­hold­ing tax on pay­ments to non-res­i­dent artistes or en­ter­tain­ers

The Manica Post - - Business -

WHO is a non-res­i­dent artiste or en­ter­tainer? This is a for­eign per­son who vis­its Zim­babwe with the in­ten­tion of car­ry­ing on a trade for a limited pe­riod of time. The trade is usu­ally that of a pro­fes­sional sports per­son, mu­si­cian, per­former, ac­tor, dancer, co­me­dian and any other trades of sim­i­lar de­scrip­tion.

Who is re­quired to with­hold the tax?

Any per­son who en­ters into a con­tract with a for­eign artist or en­ter­tainer is re­quired by Sec­tion 80B of the In­come Tax Act [Chap­ter 23:06] to with­hold tax on any pay­ment made to the for­eign artist or en­ter­tainer. This is usu­ally the res­i­dent con­trac­tor or pro­moter who ar­ranges or pro­motes the event and pays re­mu­ner­a­tion to the non-res­i­dent artiste and is re­ferred to as the with­hold­ing agent in the Act.

The with­hold­ing agent is any per­son who is em­ployed by the State or by a quasi-Govern­men­tal in­sti­tu­tion or con­trac­tor or reg­is­tered tax­payer and is re­spon­si­ble for mak­ing a pay­ment to a non-res­i­dent artiste or en­ter­tainer of any amount that is due in terms of a con­tract.

Def­i­ni­tion of pay­ment

Pay­ment is de­fined as pay­ment by cash, barter, set-off, cred­it­ing a di­rec­tor’s loan ac­counts, in­ter com­pany deb­its and cred­its or by any other set­tle­ment of obli­ga­tions what­so­ever and in any form.

Obli­ga­tions of the with­hold­ing agent

◆ To with­hold 15% of each amount payable to the payee un­der the con­tract con­cerned.

◆ To pay each with­held amount to the Com­mis­sioner on or be­fore the 10th day of the month fol­low­ing that in which pay­ment was made.

◆ To sub­mit re­turns (Rev 5 Form) of the amounts with­held.

◆ To take all rea­son­able steps to en­sure that the non-res­i­dent artiste or en­ter­tainer with whom the con­tract is con­cluded, is made aware of these pro­vi­sions. ◆ To is­sue a cer­tifi­cate to the payee show­ing the amount with­held. Re­spon­si­bil­ity of re­mit­ting the tax if the con­trac­tor or pro­moter is a non-res­i­dent

Where a non-res­i­dent con­trac­tor or pro­moter pays re­mu­ner­a­tion to non-res­i­dent en­ter­tain­ers or artistes, the en­ter­tain­ers and artistes are di­rectly re­spon­si­ble for pay­ing the tax to ZIMRA. It is a re­quire­ment that a for­eign artiste or en­ter­tainer gets a tax clear­ance let­ter from ZIMRA be­fore per­form­ing in Zim­babwe.

The pro­moter of a for­eign artiste or en­ter­tainer is re­quired to make an ap­pli­ca­tion for a tax clear­ance to ZIMRA, with the fol­low­ing at­tach­ments:

◆ Clear­ance let­ter from the Na­tional Arts Coun­cil of Zim­babwe ◆ Copies of the cur­rent pass­port of the for­eign artiste ◆ Signed con­tract be­tween the pro­moter and for­eign artiste or en­ter­tainer

◆ Pay­ment de­tails and proof of pay­ment made to the artiste by the pro­moter if al­ready paid

Cal­cu­la­tion of With­hold­ing Tax and pay­ment to ZIMRA

◆ ZIMRA will com­pute 15% With­hold­ing Re­quire­ments to get a for­eign artiste clear­ance let­ter

Tax payable by the for­eign artiste or en­ter­tainer based on the fees in the con­tract, re­gard­less of whether the pro­moter has paid the for­eign artiste the full amount or not.

◆ ZIMRA is­sues to the pro­moter a com­pu­ta­tion of With­hold­ing Tax which will be used to make pay­ment to the ZIMRA Com­mis­sioner Gen­eral’s bank ac­count.

◆ The pro­moter is re­quired to sub­mit With­hold­ing Tax Re­turn (Rev 5) and proof of pay­ment to ZIMRA. ◆ ZIMRA will is­sue the for­eign artiste with a clear­ance let­ter. A with­hold­ing agent who fails to with­hold the tax and/or pay to ZIMRA, on be­half of the non-res­i­dent artiste or en­ter­tainer will be held per­son­ally li­able for the tax that should have been paid to the Com­mis­sioner Gen­eral of ZIMRA and in ad­di­tion, a 100% penalty is also charge­able on the amount due.

◆ 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. To con­tact ZIMRA: What­sApp line : +263 782 729 862 Visit our web­site : www. zimra.co.zw Fol­low us on Twit­ter : @Zim­ra_11 Like us on Face­book : www.face­book.com/ZIMRA.11 Send us an e-mail : pr@zimra.co.zw/ web­mas­ter@zimra.co.zw Call us (Head Of­fice) : 04 –758891/5; 790813; 790814; 781345; 751624; 752731

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