adminDid you know that non-executive directors’ fees, under the Income Tax Act [Chapter 23:06], are subject to Withholding Tax in terms of Section 36J as read with the Thirty-Third Schedule or Employees Tax in terms of Section 73 as read with the Thirteenth Schedule depending on the person’s earning?
Withholding taxes on non-executive directors’ fees
Where the director receives fees and no other payments from the corporate body of which he is a director, this will be subject to Withholding Tax at the rate of 20 percent in terms of Section 36J of the Income tax Act as read with the thirty-third schedule to the same Act. The amount withheld should be remitted to the Commissioner-General within 10 days of payment of such fees.
Employees tax on non-executive directors’ Income
Where the director receives, over and above the directors’ fees, other payments from the corporate body of which he is a director, the fees and other amounts received will be treated as remuneration/employment income and will be subjected to Employees’ Tax in terms of Section 73 of the Income Tax Act as read with the Thirteen Schedule to the same Act.
Examples of other payments that will result in the payments to the director being treated as employment income include:
Allowances
Overtime pay
Commissions, and benefits paid in cash or kind.
Employees’ tax will be computed in accordance with the applicable tax tables for the tax period. Tax tables can be downloaded from the ZIMRA website www.zimra.co.zw.
The Employees’ Tax withheld should be remitted to the Commissioner-General on or before the 10th day of the following month.
Penalties and Interest Charged for Late Remittances of Tax
Our valued clients are hereby informed that penalties and interest are chargeable on late remittances of both PAYE and Withholding Tax.
The Zimbabwe Revenue Authority (ZIMRA) also carries out periodic audits in order to check whether the correct taxes are paid on time and in full.
Our valued clients are reminded that Employees’ Tax (PAYE) for the month of November 2014 is due on the 10th of December 2014. The fourth QPD is due on the 20th of December.
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: 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 : [email protected], Call us (Head Office): 04 –758891/5; 790813; 790814; 781345; 751624; 752731
Online Reporter