02-16-2009, 10:46 PM
Hi,
I have a question and would very much appreciate your assistance.
Let's assume Company ABC imports zips, does some work in it and then sells on to local businesses. Most of the customers of Company ABC are supposed to withhold 3.5% from the invoice value. It turns out and that not all customers withhold this 3.5%, maybe because some are not supposed to withhold (AOP) and some have forgotten to withhold. I was reading that the clients/customers who have not withheld money are personally liable for this.
I know that the 3.5% tax withheld on this kind of revenue would be a final tax regime. My question is when Company ABC prepares the Income Tax Return, how would they record those material supply revenues for which no money has been withheld? Do they disregard that income? Would that income fall under Normal Tax Regime? Would it make a difference if the Company ABC's customers "forgot" to withhold or were not "prescribed" to withhold?
Please share your opinions. Thanks,
Imran