asked the Minister for Finance in relation to the withholding tax for professional fees in the Finance Act, 1987, if it is the practice to withhold the tax from fees for advertising agents in respect of sums paid by accountable persons to advertising agents for advertising agency services.
Written Answers. - Withholding Tax.
89.
Withholding tax is deducted from the gross amount of a payment, exclusive of value-added tax, made by an accountable person (as defined in section 14 (1) of the Finance Act, 1987, and section 8 (b) of the Finance Act, 1988) for professional services, (as defined by section 13 (1) of the Finance Act, 1987). The following rules apply in relation to deducting withholding tax from payments for advertising services:
(a) Payments made by an accountable person to a newspaper or other advertising medium in order to obtain advertising space or time do not attract the withholding tax. The same position applies where the payment is made to a person (such as an advertising agency) acting as the agent for a newspaper etc. and the agent sells such space or time on a commission or handling charge basis.
(b) Where such space or time is provided by an advertising agency as part of an advertising service the total payment for the service (including all costs incurred in providing the service) is subject to withholding tax.