Did you know that you can avoid unnecessary penalties and interest by following basic tax and duty compliance requirements? Statutory Requirements for Corporate Income Tax Income Tax is tax levied on the profits of a business at 25% plus 3% Aids Levy. This tax is paid every quarter based on projected business profits.Client’s Obligations under Corporate Income Tax
Every company is required to register with ZIMRA within 30 days of incorporation or registration with the Registrar of Companies;
A copy of the memorandum and articles of association constituting the company are required to be filed with the Commissioner General of ZIMRA, within 30 days of the company’s incorporation or registration under any law;
A representative/Public Officer who will represent the company, -who is a Zimbabwean resident and is registered with ZIMRA – must be appointed;
Client needs to open a bank account before registration with ZIMRA. A bank clearance letter is provided by ZIMRA to falicitate the opening of the bank account.
Adhere to Quarterly Payment Dates (QPDs) by estimating the Provisional Tax at the beginning of the year then charge 25.75% (aggregate tax rate inclusive of Aids Levy) tax on this estimated taxable profit. The resultant tax is paid in four annual instalments as follows:
25 March 2016-10%
25 June 2016-25%
25 Sept 2016-30%
20 Dec 2016-35%
Submit ITF 12B (a return for Provisional Tax payments) when making payments under QPDs.
Submit an Income Tax return (ITF 12C) on-line using ZIMRA’s e-services platform when it is due.
Costs associated with non-compliance come in various forms such as:
Civil penalties for failure to submit returns;
Time wasting;
Court cases that may affect the image of the business;
High collections costs, as well as possible legal fees; and
Extra costs in additional tax and penalties that may negatively affect cash flows.
To avoid such costs, clients should:
Keep proper records;
Adhere to due dates for payment of taxes or submission of returns;
Pay the correct amount of tax; and
Declare the correct amount of taxable income in their tax returns.
Our valued clients are reminded that Value Added Tax (VAT) for the month of March 2016 is due on 25 April 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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