FAQs - Large Taxpayer

1. Who is a large taxpayer?

2. Is a taxpayer required to inform the MRA when its gross annual income has exceeded the threshold of Rs 100 million?

3. Does an entity cease to be a large taxpayer when its annual turnover falls below Rs 100 m?

4. How shall a large taxpayer submit its return?

5. May a large taxpayer file for the same period both manual and electronic returns?

6. Where should a large taxpayer apply for a Tax ruling?

7. What shall a large taxpayer do if it wishes to be registered for VAT?

8. What are the main functions of the Large Taxpayer Department?

1. Who is a large taxpayer?

   A large taxpayer is a person whose annual gross income including exempt income for income tax purposes exceeds Rs 100 million.

2. Is a taxpayer required to inform the MRA when its gross annual income has exceeded the threshold of Rs 100 million?

   No, it is not necessary. It is for the Director of Medium and Small Taxpayer Department, based on information available, to determine when a person qualifies as a large taxpayer. The Director of Medium and Small Taxpayer Department will transfer all accounts, returns, assessments and other documents in respect of that person, to the Director of Large Taxpayer Department who as from the date of the transfer will administer all tax matters in respect of that person.

3. Does an entity cease to be a large taxpayer when its annual turnover falls below Rs 100 m?

   No, it doesn’t. Once an entity is registered as a large taxpayer it will continue to be considered as a large taxpayer even if its annual turnover falls below Rs 100 m. It will only be deregistered as a large taxpayer upon cessation of its business or its liquidation.

4. How shall a large taxpayer submit its return?

   A large taxpayer is required by law to submit his returns electronically, and pay any tax due in accordance with its return. However, under exceptional circumstances, the Director of Large Taxpayer Department may authorise it to submit manual returns and pay its tax by cheques.

5. May a large taxpayer file for the same period both manual and electronic returns?

   No, it cannot. A large taxpayer is under a legal obligation to furnish electronic returns.

6. What shall a large taxpayer do if it wishes to be registered for VAT?

   When a large taxpayer needs to compulsorily register or wishes to voluntarily register for VAT, it should submit an application to the Director, Operational Services Department

7. Where should a large taxpayer apply for a Tax ruling?

   Any application for a ruling under Section 159 of the Income Tax Act or Section 69A of the Value Added Tax Act shall be addressed to the Director-General.

8. What are the main functions of the Large Taxpayer Department?

   The Large Taxpayer Department has main functions are in respect of its responsibilities in relation to large taxpayers and deal with issues on international taxation:

   1. To collect, assess and account for all taxes chargeable by virtue of the revenue laws;

   2. To carry out tax audits for ensuring the smooth running of the self-assessment system;

   3. To process application for income tax refund and VAT repayment of large taxpayers;

   4. To attend to queries from taxpayers including those relating to international taxation issues;

   5. To deal with requests for exchange of information from treaty partners;

   6. To negotiate Double Taxation Avoidance Agreement (DTA), Tax Information Exchange Agreements (TIEAs) and Competent Authority Agreements (CAAs);

   7. To oversee the work of the FATCA / CRS / CbCR unit;

   8. To reply promptly to OECD, EU, ATAF, International Tax Justice among others with respect to questionnaires and surveys on BEPS, tax regimes, and other international tax matters.