Newsletter
WITHHOLDING TAX ON INCOME PAID BY POSTDATED CHECKS
The Ministry of Finance stated in a ruling dated 1 September 2006 that from that date onwards, in the event that an enterprise issues a postdated check for payment of income and such income is subject to withholding tax, the enterprise, being the tax withholder, should duly withhold tax on the date of the check. The recipient should de-clare said income in his/her individual income tax return for the year in which the check was issued. In the event that the check fails to clear, given that individual income tax is imposed on income actually received, the individual may declare said income in his/her tax return for the year in which he/she actually receives the in-come.