1st Annual Baker Tilly Summer School

Strengthening Tax Planning and Risk Management for

Enhanced Compliance

11 October 2024

Trendset Tax & Advisory (Pvt.) Ltd.

The practical aspects of QPDs and final income tax return

Contact

David C. Masaya david.masaya@trendsettax.com

Trendset Tax & Advisory (Private) Limited

36 Ascot Road Avondale
Harare, Zimbabwe

Telephone: +263 772 416 205

Agenda

1. Developments in 2024 and other issues to take note of

2. Practical aspects on the preparation of QPD and final tax returns
3. QPDs rules
4. PN71 of 2024
5. Questions?

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1. Developments in 2024 and other issues to take note of

1. The requirement to use licensed tax agents – PN 6 of 2024 lists agents registered as of 31/12/2023

2. Increase of tax rate from 24% to 25% w.e.f. 1 January 2024 and to take note of concessions to
i. Licenced investors, industrial park developers and operators of tourist facilities in tourist development zones–
there is an increase in solar power projects (after first 5 years of tax at zero per centum)
ii. Power generation projects – zero per centum and 15% thereafter

3. Public Officer responsibilities and expectations from ZIMRA, from PN 30 of 2024, is not: -
i. a person appointed for just fulfilling a requirement of the tax law but is one with great tax responsibilities
ii. a person who is not supposed to know some tax issues of the company
iii. a person the company does not trust or have confidence in
iv. a person who cannot stand up to support tax compliance requirements.

4. Returns filed after 12 April to be in ZiG and now ZWG – PN37 of 2024

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2. Practical aspects on the preparation of QPD and final tax returns

1. Recommendation is that the QPD returns should be compiled on the same principles as the final return

2. Preparation of schedules
i. Office relocation costs
ii. Legal fees
iii. General/miscellaneous expenses
iv. Entertainment
v. Donations
vi. Consulting and professional fees
vii. Exchange gains and losses
viii. Interest expenses and thin capitalisation
ix. on fees and please note the wording “…expenditure incurred on fees, administration and management in
favour of a company of which the taxpayer is an associated enterprise, or (where the company is a foreign
company) the local branch…”
x. Turnover on VAT returns reconciled to financial statements
xi. Staff/employment costs reconciled to PAYE returns submitted to ZIMRA
xii. Analysis of bank credits to revenue and other deposits

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2. Practical aspects on the preparation of QPD and final tax returns

3. Capital allowances
i. Asset register and schedules that support build up of cost of asset
ii. Final capital allowances schedule should allow easier of computation of recoupment years after claim of
allowance
iii. VAT not claimed as input tax is a final cost
iv. Clear distinction between tax and accounting rules, demo vehicles, outside car parks, sewer connections,
repairs vs improvements, classification of buildings e.g. industrial vs commercial

4. Adjustment of prior year figures – unrealised exchange losses and gains, provisions

5. Thorough understanding of tax and accounting rules and not just either of, e.g. construction costs, suspended
interest and lately rent expense

6. Retention of records, ensuring that information that is used in compiling QPDs and all returns is filed for at least 8
years and longer for permanent information. Thoroughness at preparation time and you should be able to retrieve
information swiftly, or else… You must have seen something similar to the below.

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2. Practical aspects on the preparation of QPD and final tax returns

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3. QPDs rules

1. Based on a forecast to year end and adjustments along the year compared to previous APDs

2. 10% rule and margin of error

3. Commissioner empowered to make an estimate of QPDs and which will be final

4. 30% Withholding Amounts deducted during the year

5. Businesses that commence during the course of the year

6. Businesses with a year end other than 31 December

7. Businesses changing from a December year end to another and the transition to new dates

8. PN 71 of 2024, payment of QPDs, 50% of QPD2 and QPD3 payable in ZWG

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4. PN71 of 2024

Shown as an Appendix

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 Your questions and comments please?

Thank you

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