Hi All
We recently did some work (IT consulting) for a Zambian client. (We are based in South Africa). When they paid us, they withheld 20% of the payment. They said it is withholding tax, and have provided us with a certificate from Zambian Revenue services, to show they paid it over.
Please can someone explain the accounting process, and if this just has to be expensed our side, or if there is a possibility of claiming the amount back against taxes paid? (And if so, what is the process?). Google tells me that the 6quin relief has fallen away in 2016, and now it can only be a 6quat deduction, which basically means we take the knock as a tax deductible expense, but can't claim it as a rebate against taxation paid. Is this correct?
The client keeps telling me I can claim it back against tax as a rebate, but can't tell me how to go about it in SA. It is my fault for not researching the implications for doing business into Africa correctly, but taking a 20% knock on all work done for WHT doesn't make the work profitable. I would hate to pull the plug or the project, but working for a loss makes poor business practice.
Any advice would be appreciated.
Thanks
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