Who Should Register?
The VAT legislation requires traders engaged in the business of supplying goods and or services and whose annual turnover exceeds or is likely to exceed a set threshold (US$60000.00 per annum) to apply to the Commissioner General of ZIMRA for VAT registration. Only registered operators will be allowed to charge and collect VAT whenever they supply taxable goods or services and remit to the Authority.
Every registered operator will be issued with a certificate of registration and such certificate shall be displayed prominently and at a place where it can be easily seen. This will allow for easy identification of traders registered for VAT.
Cancellation of Registration of Separate Trades, Branches or Divisions
Section 51 of the Value Added Tax Act provided for separate registration of trades, branches or divisions for VAT purposes by any registered operator carrying on separate trade or operating a separate branch or division.
Such separate trades, branches or divisions were expected to maintain an independent system of accounting which could be separately identified by reference to the nature of the activities carried on or the location of the separate trade, branch or division.
Section 51 was repealed with effect from 1st January 2010. This therefore means that registration of all separate trades, branches or divisions was cancelled with effect from 1st January 2010.
The last VAT returns due by the separate registered trades, branches or divisions are for the tax period ended 31st December 2009. The VAT return and the payment due for that period should have been submitted by the 10th of January 2010.
The registered operator who had initially applied for separate registration is charged with the responsibility of accounting for all VAT due and fulfilling all VAT requirements in relation to all its separately registered branches, trades or divisions.
All liabilities not fulfilled by the de-registered branches or divisions shall revert to the main branch in terms of Section 51(5) of the VAT Act.
The certificates of VAT registration issued to such trades, branches or divisions are to be returned to ZIMRA
Who May Be Excluded From Registration?
The following will not be obliged to register for VAT:
- traders who will be solely dealing in exempt supplies,
- any person conducting private or recreational pursuit or hobby,
- any service provided by an employee to his employer or small traders whose taxable turnover is below US$60000.00 per annum.
What Are The Responsibilities of a Registered Person?
A registered person is obliged to comply with the following requirements of the VAT Act:
- keep accounting records for a period of at least six years after the tax period to which they relate
- complete and submit VAT returns as per requirement*
- calculate and remit the VAT due to the Commissioner General of ZIMRA on or before the due date*
- issue tax invoices, debit notes or credit notes
- account for VAT if one sells or retains stock or assets when one ceases to be registered for VAT
- advise the Commissioner General of any changes in business details
*In terms of the Finance (No.2) Act of 2009, with effect from 1st August 2009, every registered operator shall, with the period ending on the fifth day of the first month commencing after the end of a tax period relating to such registered operator or, where such tax period ends on or after the first day of a month, within the period ending on such last day:
- furnish the Commissioner with a return in the prescribed form reflecting such information as may be required for the purpose of the calculation of tax; and
- calculate the amounts of such tax and pay tax to the Commissioner or calculate the amount of any refund due to the registered operator.