adminfor anyone to first register for VAT before entering into business agreements, transactions or arrangements of their choice. A trader is free to trade with any person whether VAT registered or not.
It should be noted that some traders are not registered for VAT because they are not eligible for registration. Such traders should not suffer any prejudice in transacting business with registered traders in the market place.
They can sell their goods or services to any trader without charging VAT. However, when they buy from a registered trader they still pay VAT for any goods or services that are properly chargeable.
Who is eligible to register for VAT?
A trader is eligible to register for VAT purposes if the value of taxable supplies exceeds or is expected to exceed US$60 000 within a period of 12 months.
Can an unregistered operator charge VAT?
Only a properly registered operator for VAT purposes may charge VAT on the supply of goods and services. It should be stated that although a non-registered trader is free to trade with any other person, such unregistered operator cannot charge VAT in respect of the supplies made.
Who may be excluded from
registration?
The following persons are not required to register for VAT:
l Traders whose taxable turnover is below US$60000,00 per annum
l Traders who will be solely dealing in exempt supplies
l An employee providing service to his/her employer
What are the responsibilities of a trader who is registered or is eligible for VAT
registration?
A trader who is registered or is eligible for registration is obliged to comply with the following requirements of the VAT Act:
l Charge VAT where applicable, issue tax invoices, debit notes or credit notes as prescribed
l Complete and submit VAT returns to Zimra as prescribed under the VAT Act
l Calculate and remit the VAT due to the Commissioner-General of Zimra on or before the 25th of every month
l Keep accounting records for at least six years after the tax period to which they relate
l Account for VAT if one sells or retains stock or assets when one ceases to be registered for VAT
l Advise the Commissioner-General of Zimra of any changes in business details
What are the consequences of failure to comply with registration requirements?
Failure to register for VAT when a trader is eligible constitutes an offence in terms of the VAT Act. In the case of failure to register and in cases where the operator has reached/exceeded a turnover of US$60 000, the Commissioner-General of Zimra may compulsorily register the operator.
The operator would be required to pay the VAT due, interest and penalties on the computed debt.
It is also an offence for a trader to charge VAT without being properly registered and any person who is involved in such malpractice may be prosecuted in terms of the provisions of the VAT Act.
l This article was compiled by the Zimbabwe Revenue Authority. Please contact us using the following information should you require clarity on any of the issues:
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
Bongani Ndlovu
Online Reporter