Advance Tax
What is advance Tax?
Advance Tax is a prior payment of income tax obligation by a business or company before the end of the financial year. It is paid nine times during a tax year by Business and Companies. The advance tax is determined payable amount from the preceding years assessment of the business or company.
Types of Advance Tax
The two types of advance tax are as follows:
- Advance Tax for Persons other than a Company (Sole-trader, Trustees, Partners, Directors etc.)
- Company Advance Tax
Due Dates for Advance Tax Payment
The due dates for advance Tax Payments differs for Businesses and Companies hence it is important to note the difference. The due dates are as follows:
- Advance Tax for persons other than a Company (Sole-trader, Trustee, Partners, Directors etc.)
- 30 April, 31 May, 30 June, 31 July, 31 August, 30 September, 31 October, 30 November and
- 31 December
- Company Advance Tax
- Sixth month of Company’s financial YE
- Seventh month of Company’s financial YE
- Eighth month of Company’s financial YE
- Ninth month of Company’s financial YE
- Tenth month of Company’s financial YE
- Eleventh month of Company’s financial YE
- Twelfth month of Company’s financial YE
- First month of the following tax year
- Second month of the following tax year
Payment Installments Order for Advance Tax
- Advance Tax for Persons other than a Company (Sole traders, Trustees, Partners, Directors etc.)
Advance tax is payable in the following manner:
Installment No. Due Date Amount Due
1 30th April 11 1/9% x (A-B)
2 31st May 11 1/9% x (A-B)
3 30th June 11 1/9% x (A-B)
4 31st July 11 1/9% x (A-B)
5 31st August 11 1/9th x (A-B)
6 30th September 11 1/9th x (A-B)
7 31st October 11 1/9th x (A-B)
8 30th November 11 1/9th x (A-B)
9 31st December 1 1/9th x (A-B)
If advance tax payable is less than $120, it is due on 30th September
Where;
‘A’ is the individual’s assessed income tax liability for the preceding (previous) tax year after reduction of any foreign tax credit allowed to the company for that year; and
‘B’ is the total allowable withholding tax credits such as provisional tax
- Company Advance Tax
Advance tax installments computed by the following formula:
11 1/9% X (A – B)
Summary of Company’s Year End and Advance Tax Payments Due dates: