Withholding Tax Exemption Certificate

What is a Withholding tax exemption certificate?

A Withholding tax exemption certificate is issued by MRA to a taxpayer to exempt the taxpayer from being withheld tax on specified payments at a time the payment is being made. A taxpayer is required to apply to MRA to be issued with the certificate.

The application can be submitted to any nearest Domestic Taxes Division office.  Bear in mind that a taxpayer who is exempted from being deducted Withholding tax is still required to file an income tax return to MRA at the end of his/her accounting period.

How can one qualify for a Withholding tax exemption certificate?

A taxpayer can qualify for the certificate if he/she has:

1.      Registered for tax

2.      Truthfully and honestly compiled and timely submitted tax returns to MRA for all the years he/she has been operating the business

3.      Settled all outstanding tax liabilities due to Government

Does a Withholding tax exemption certificate apply on all items?

The certificate does not apply on all items. For example, a Withholding tax exemption certificate cannot apply on rent, payments for royalties, fees and commissions, payment to contractors and sub-contractors and on bank interest.

Please, note that a Withholding tax exemption certificate is only valid for one Government financial year which ends on 30th June. For instance, a Withholding tax exemption certificate obtained on 1st November 2019 will expire on 30th June 2020.

Can one buy or sell a Withholding tax exemption certificate?

Note: A Withholding tax exemption certificate cannot be bought or sold by anybody. In this context, we would like to encourage all business people in the country to register their businesses for tax, compile and submit a tax return and timely settle tax liabilities. This will, as explained earlier on, enable MRA to consider issuing you with a Withholding tax exemption certificate upon application.

Feedback: tax@mra.mw, 0888 986 200 / 0888 958 220