UPDATE: New 3% Withholding Tax on Specified Services

UPDATE: New 3% Withholding Tax on Specified Services

An update on recent developments with the 3% Withholding Tax on Specified Services regime


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Withholding tax
  • Initial implementation phase commences September 1, 2015.
  • Specified large taxpayers are now required to withhold tax at 3% on fees of $50,000 or more paid to a variety of service providers including accountants, lawyers, engineers, caterers, entertainers, janitors, as well as those providing rental of motor vehicles/equipment and those providing transportation, haulage or tours. 
  • Tax compliant service providers are exempt from the withholding tax once issued with an Exemption Certificate.  
  • Penalty for failure to withhold can be up to 50% of the tax due.
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