A dormant company is one that has been incorporated at Companies House but is not currently carrying on any kind of business activity or receiving any form of income. Many schools of thought consider this type of company to be dormant (inactive) for Corporation Tax purposes. There are so many reasons why a company can result into being dormant such as restructuring a previously active business or protecting a trading name to prevent it from being registered by another business.

VAT returns attract heavy fines and penalties if not submitted in time. So it is very wise to make sure that in the event of being dormant you go and deregister your company on VAT subscription. In the event that you do not deregister your company and you miss any one of the returns, ZIMRA will attach a fine and penalties on your account and in the event you now resume trade and you will be faced with heavy penalties and fines that have been accumulating over the time of not trading. If you are not sure of the VAT subscription click here and learn how to check for ZIMRA subscription.