Brokers & agents

Broker and agency businesses connect buyers and sellers to close a deal, earning a commission in return — for example, real estate brokers or insurance agents. The area that needs special attention is "proof that the deal was completed," since commission income arises from a successfully closed transaction, not from the value of the asset traded. Without a clear contract or supporting documents, this can affect both revenue recognition and correct withholding tax as follows:

• Without documentation confirming the date a deal was completed, income may be recognized in the wrong period, causing monthly performance figures to not reflect the work actually done.
• If withholding tax on commission income is deducted at the wrong rate, or withholding tax certificates aren't kept, you may lack the evidence needed to claim a tax credit at annual filing.

1. What documentation confirms a deal is "completed" for your business (contract, purchase order, confirmation email)?
2. Is withholding tax on the commission you receive deducted at the correct rate?
3. Do you keep withholding tax certificates from every client on file?
4. If you operate as a VAT-registered juristic entity, is VAT correctly added to the commission you charge?
5. Has your annual commission income reached the threshold requiring VAT registration?