Withholding tax on payments to non-resident artistes or entertainers

TWho is a non-resident artiste or entertainer? HIS 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 artiste 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 artiste 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.

e 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, intercompany debits and credits or by any other settlement of obligations whatsoever and in any form.

Obligations of the withholding agent

To withhold 15 percent 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.

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 percent 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.