Professional Services Withholding Tax (PSWT)

What are professional services?

Professional services for which PSWT is operated include:

  • medical, dental, pharmaceutical, optical, aural or veterinary services
  • architectural, engineering, quantity surveying or surveying nature, and related services
  • accountancy, auditing or finance services
  • financial, economic, marketing or advertising services
  • legal services
  • geological services.

Treatment of expenses

If PSWT applies to a payment it will also apply to any expenses claimed by the service provider and paid by the accountable person. This is the case whether the expenses are either paid or invoiced separately.

Examples of expenses include:

  • costs of travel, subsistence, postage and printing
  • payments to third parties engaged by the service provider to deliver the service.

Treatment of late payment interest

It is an implied term of every commercial contract that if debts are not paid on time, interest is charged. If interest is paid on a payment for professional services, PSWT should be deducted from the interest also.

Next: Payments excluded from PSWT