Is PAYE deductible on commission paid by one company to another?
09 March 2015
Posted by: Author: SAIT Technical
Author: SAIT Technical
Q: Is 25% PAYE deductible
on commission paid to a company?
Company A is appointed by company B (no formal agency
agreement). The business arrangement is that company B will facilitate the sale
of software supplied by company A. Company B will invoice company A for
commission earned on the sale.
Is company A obliged to deduct PAYE of 25% from the amount
of commission invoiced by company B?
The only references I can find refer to an individual
earning commission. I would think that as this is revenue earned by a company,
no PAYE would be deducted and income tax would be payable on the profit
declared at the end of the profit posted.
whether the company is a "personal service provider” as defined in the 4th
Schedule to the Income Tax Act. If not, then the revenue will form part of the
normal revenue stream of the company and employees’ taxes need not be deducted
Disclaimer: Nothing in this query and answer should be construed as
constituting tax advice or a tax opinion. An expert should be consulted for
advice based on the facts and circumstances of each transaction/case. Even
though great care has been taken to ensure the accuracy of the answer, SAIT do
not accept any responsibility for consequences of decisions taken based on this
query and answer. It remains your own responsibility to consult the relevant
primary resources when taking a decision.