Withholding Tax

Withholding tax...
 

The payer of the income is a person who has duty to withhold or deduct the tax from the income and such tax is to be paid to the Revenue Department. The payer of the income can be employers – ordinary persons, partnerships, companies, associations or groups of persons. The recipient of the income is a person who has a job and has an income, for example, salarymen. The person who withholds the tax, or “the payer of the income” has duty to always deduct the tax before paying to “the recipient of the income” so that such withholding tax is to be paid to the Revenue Department. After the payer of the income deduct the tax from the income, he/she must have an evidence for withholding such tax called “Non - Resident Withholding Tax Certificate” presented to the recipient of the income.
 

 

Typically, the withholding tax is treated as a payment on account of the recipient's final tax liability, when the withholding is made in advance. When calculating the tax, sometimes we find out that the tax liability to the government which received the withholding tax is less than the tax withheld, it can be refunded within the stipulated time. However, if the companies or entrepreneurs pay the income and withhold the tax from such income, such tax withheld must be paid to the Revenue Department or else it is considered as a violation of the law.
 

 

The tax return that the payer of the income has to file to the Revenue Department must follow the type of the income. Such tax return has to be filed to the Revue Department within 7 days since the last day of the month that he/she withholds the tax or no later than the day 7th of the next month.

 

Credit: www.flowaccount.com