Zimbabwe: Tax system in a nutshell
Celia Becker is Tax AdvisorA Tax Advisor is a professional who provides specialised advice to individuals, businesses, and organisations on various tax-related matters. They play a crucial role in guiding clients through complex tax laws and ensuring compliance with the latest regulations while identifying opportunities for tax efficiency. Tax Advisors must stay updated on legislative changes and understand the impact of international tax treaties,... at ENSafrica 
in
Johannesburg.
in Johannesburg.I. Background
The Zimbabwean tax system is sourced-based, with a standard corporate income taxCorporate Tax refers to the tax imposed by governments on the income or capital of corporations. Corporations, considered separate legal entities, are taxed on their profits, meaning the income generated from their operational activities, investments, and other financial undertakings. This tax is generally a key revenue source for governments, helping to fund public services, infrastructure, and other essential functions. The... rate of 25 percent and maximum personal income taxIncome Tax is a direct levy imposed by governments on the income generated by individuals, corporations, and other entities within a specific jurisdiction. It serves as a major source of revenue for governments and funds various public expenditures, such as infrastructure projects, healthcare, education, national security, and welfare programs. The tax is generally calculated as a percentage of the taxable... rate of 45 percent. A three percent AIDS levy is imposed on both corporate and personal income taxIncome Tax is a direct levy imposed by governments on the income generated by individuals, corporations, and other entities within a specific jurisdiction. It serves as a major source of revenue for governments and funds various public expenditures, such as infrastructure projects, healthcare, education, national security, and welfare programs. The tax is generally calculated as a percentage of the taxable...
a standard corporate income taxCorporate Tax refers to the tax imposed by governments on the income or capital of corporations. Corporations, considered separate legal entities, are taxed on their profits, meaning the income generated from their operational activities, investments, and other financial undertakings. This tax is generally a key revenue source for governments, helping to fund public services, infrastructure, and other essential functions. The... rate of 25 percent and maximum personal income taxIncome Tax is a direct levy imposed by governments on the income generated by individuals, corporations, and other entities within a specific jurisdiction. It serves as a major source of revenue for governments and funds various public expenditures, such as infrastructure projects, healthcare, education, national security, and welfare programs. The tax is generally calculated as a percentage of the taxable... rate of 45 percent. A three percent AIDS levy is imposed on both corporate and personal income taxIncome Tax is a direct levy imposed by governments on the income generated by individuals, corporations, and other entities within a specific jurisdiction. It serves as a major source of revenue for governments and funds various public expenditures, such as infrastructure projects, healthcare, education, national security, and welfare programs. The tax is generally calculated as a percentage of the taxable...The disposal of immovable property and marketable securities are subject to capital gains taxCapital Gains Tax (CGT) is a tax imposed on the profit an individual or entity earns from the sale or disposal of a capital asset. This tax is not levied on the total sale price of the asset but rather on the capital gain, which is the difference between the asset’s acquisition cost (or “base cost”) and its sale price.... at rates ranging from one percent of gross proceeds to 20 percent of the net gain.
VAT is imposed on the supply of goods and services in Zimbabwe and on the importation of goods into Zimbabwe. VAT on imported services only applies to services not utilised for the making of taxable supplies.
in Zimbabwe and on the importation of goods into Zimbabwe. VAT on imported services only applies to services not utilised for the making of taxable supplies.Withholding tax is deducted at source on specified payments both to residents and non-residents. Withholding tax is generally an advance tax in the case of residents and a final tax in the case of non-residents.
in the case of residents and a final tax in the case of non-residents.A compulsory national pension scheme is administered by National Social Security Authority (NSSA) and employers are also obliged to contribute to the manpower development levy and standards development levy.II. Corporate income taxCorporate Tax refers to the tax imposed by governments on the income or capital of corporations. Corporations, considered separate legal entities, are taxed on their profits, meaning the income generated from their operational activities, investments, and other financial undertakings. This tax is generally a key revenue source for governments, helping to fund public services, infrastructure, and other essential functions. The...
Every person who has derived taxable income in a particular year of assessment is subject to corporate income taxCorporate Tax refers to the tax imposed by governments on the income or capital of corporations. Corporations, considered separate legal entities, are taxed on their profits, meaning the income generated from their operational activities, investments, and other financial undertakings. This tax is generally a key revenue source for governments, helping to fund public services, infrastructure, and other essential functions. The.... “Taxable incomeThe tax base is a fundamental concept in taxation, representing the total amount of economic activity or assets upon which a tax is levied. It is the foundation upon which governments calculate the amount of tax owed, based on factors like income, property value, sales, or corporate profits. Understanding the tax base is essential for tax professionals, businesses, and policymakers,...” is calculated as gross incomeGross Income is a comprehensive term used to define the total income received by an individual or entity before any deductions, exemptions, or allowances. The concept is central to the calculation of taxable income across different tax jurisdictions. It encompasses a broad range of income sources, such as wages, salaries, business income, dividends, interest, rental income, and other forms of... less exempt income and allowable deductions. Gross incomeGross Income is a comprehensive term used to define the total income received by an individual or entity before any deductions, exemptions, or allowances. The concept is central to the calculation of taxable income across different tax jurisdictions. It encompasses a broad range of income sources, such as wages, salaries, business income, dividends, interest, rental income, and other forms of... is defined as the total amount received by or accrued to or in favour of a person in any year of assessment from a source within or deemed to be within Zimbabwe and generally excludes amounts ofa capital nature.
in a particular year of assessment is subject to corporate income taxCorporate Tax refers to the tax imposed by governments on the income or capital of corporations. Corporations, considered separate legal entities, are taxed on their profits, meaning the income generated from their operational activities, investments, and other financial undertakings. This tax is generally a key revenue source for governments, helping to fund public services, infrastructure, and other essential functions. The.... “Taxable incomeThe tax base is a fundamental concept in taxation, representing the total amount of economic activity or assets upon which a tax is levied. It is the foundation upon which governments calculate the amount of tax owed, based on factors like income, property value, sales, or corporate profits. Understanding the tax base is essential for tax professionals, businesses, and policymakers,...” is calculated as gross incomeGross Income is a comprehensive term used to define the total income received by an individual or entity before any deductions, exemptions, or allowances. The concept is central to the calculation of taxable income across different tax jurisdictions. It encompasses a broad range of income sources, such as wages, salaries, business income, dividends, interest, rental income, and other forms of... less exempt income and allowable deductions. Gross incomeGross Income is a comprehensive term used to define the total income received by an individual or entity before any deductions, exemptions, or allowances. The concept is central to the calculation of taxable income across different tax jurisdictions. It encompasses a broad range of income sources, such as wages, salaries, business income, dividends, interest, rental income, and other forms of... is defined as the total amount received by or accrued to or in favour of a person in any year of assessment from a source within or deemed to be within Zimbabwe and generally excludes amounts ofa capital nature.In the case of partnerships, each partner is liable to tax in his individual capacity on his share of the partnership income, at the corporate income taxCorporate Tax refers to the tax imposed by governments on the income or capital of corporations. Corporations, considered separate legal entities, are taxed on their profits, meaning the income generated from their operational activities, investments, and other financial undertakings. This tax is generally a key revenue source for governments, helping to fund public services, infrastructure, and other essential functions. The... rate.III. Concept of permanent establishment (PE)
Non-resident companies are subject to corporate income taxCorporate Tax refers to the tax imposed by governments on the income or capital of corporations. Corporations, considered separate legal entities, are taxed on their profits, meaning the income generated from their operational activities, investments, and other financial undertakings. This tax is generally a key revenue source for governments, helping to fund public services, infrastructure, and other essential functions. The... on income from a source within or deemed to be within Zimbabwe, irrespective of whether or not the company has a PE in the country. Capital gainsCapital gains refer to the profit earned when an asset, such as real estate, stocks, bonds, or even a collectible, is sold or exchanged for a price that exceeds its original purchase cost. These gains are a critical component of personal and corporate finance, as they influence investment strategies and tax obligations. Capital gains are realised when an asset is... ofa non-resident company from a source within Zimbabwe are also taxable in Zimbabwe.
a source within or deemed to be within Zimbabwe, irrespective of whether or not the company has a PE in the country. Capital gainsCapital gains refer to the profit earned when an asset, such as real estate, stocks, bonds, or even a collectible, is sold or exchanged for a price that exceeds its original purchase cost. These gains are a critical component of personal and corporate finance, as they influence investment strategies and tax obligations. Capital gains are realised when an asset is... ofa non-resident company from a source within Zimbabwe are also taxable in Zimbabwe.The concept of PE is not defined under domestic tax rules, but is defined in the relevant double tax agreements entered into by Zimbabwe.
in the relevant double tax agreements entered into by Zimbabwe.A. Corporate taxCorporate Tax refers to the tax imposed by governments on the income or capital of corporations. Corporations, considered separate legal entities, are taxed on their profits, meaning the income generated from their operational activities, investments, and other financial undertakings. This tax is generally a key revenue source for governments, helping to fund public services, infrastructure, and other essential functions. The... ratesThe standard corporate taxCorporate Tax refers to the tax imposed by governments on the income or capital of corporations. Corporations, considered separate legal entities, are taxed on their profits, meaning the income generated from their operational activities, investments, and other financial undertakings. This tax is generally a key revenue source for governments, helping to fund public services, infrastructure, and other essential functions. The... rate applicable to both branches of foreign companies and local incorporated companies is 25 percent. In addition, a 3 percent AIDS levy is due, increasing the effective tax rateThe Effective Tax Rate (ETR) measures the percentage of a company’s pre-tax profits that is paid as tax. Unlike statutory tax rates, which are legally prescribed by a jurisdiction, the ETR provides a more accurate picture of a company’s actual tax burden by incorporating various deductions, credits, and exemptions available. It is a crucial metric for assessing a company’s tax... to 25.75 percent.
In addition, a 3 percent AIDS levy is due, increasing the effective tax rateThe Effective Tax Rate (ETR) measures the percentage of a company’s pre-tax profits that is paid as tax. Unlike statutory tax rates, which are legally prescribed by a jurisdiction, the ETR provides a more accurate picture of a company’s actual tax burden by incorporating various deductions, credits, and exemptions available. It is a crucial metric for assessing a company’s tax... to 25.75 percent.The following industry-specific tax rates apply:
• pension funds’ income from trade and investment is subject to 15 percent tax;
• manufacturing companies exporting 50 percent or more of their output is subject to corporate income taxCorporate Tax refers to the tax imposed by governments on the income or capital of corporations. Corporations, considered separate legal entities, are taxed on their profits, meaning the income generated from their operational activities, investments, and other financial undertakings. This tax is generally a key revenue source for governments, helping to fund public services, infrastructure, and other essential functions. The... at the rate of 20 percent;
• the holder of a special mining lease is subject to corporate income taxCorporate Tax refers to the tax imposed by governments on the income or capital of corporations. Corporations, considered separate legal entities, are taxed on their profits, meaning the income generated from their operational activities, investments, and other financial undertakings. This tax is generally a key revenue source for governments, helping to fund public services, infrastructure, and other essential functions. The... at 15 percent;
a special mining lease is subject to corporate income taxCorporate Tax refers to the tax imposed by governments on the income or capital of corporations. Corporations, considered separate legal entities, are taxed on their profits, meaning the income generated from their operational activities, investments, and other financial undertakings. This tax is generally a key revenue source for governments, helping to fund public services, infrastructure, and other essential functions. The... at 15 percent;• approved Build-Own-Operate-Transfer (BOOT) or Build-Operate-Transfer (BOT) arrangements are tax exempt for the first five years and then subject to 15 percent tax for the next five years and 25 percent after 10 years;
B. Minimum tax
Zimbabwe does not apply an alternative minimum tax.
C. Capital gainsCapital gains refer to the profit earned when an asset, such as real estate, stocks, bonds, or even a collectible, is sold or exchanged for a price that exceeds its original purchase cost. These gains are a critical component of personal and corporate finance, as they influence investment strategies and tax obligations. Capital gains are realised when an asset is...
The sale of immovable property (land and buildings) and marketable securities (shares in public or private companies) in Zimbabwe are subject to capital gainsCapital gains refer to the profit earned when an asset, such as real estate, stocks, bonds, or even a collectible, is sold or exchanged for a price that exceeds its original purchase cost. These gains are a critical component of personal and corporate finance, as they influence investment strategies and tax obligations. Capital gains are realised when an asset is... tax in terms of the Capital Gains TaxCapital Gains Tax (CGT) is a tax imposed on the profit an individual or entity earns from the sale or disposal of a capital asset. This tax is not levied on the total sale price of the asset but rather on the capital gain, which is the difference between the asset’s acquisition cost (or “base cost”) and its sale price.... Act (Cap 23:01).
in public or private companies) in Zimbabwe are subject to capital gainsCapital gains refer to the profit earned when an asset, such as real estate, stocks, bonds, or even a collectible, is sold or exchanged for a price that exceeds its original purchase cost. These gains are a critical component of personal and corporate finance, as they influence investment strategies and tax obligations. Capital gains are realised when an asset is... tax in terms of the Capital Gains TaxCapital Gains Tax (CGT) is a tax imposed on the profit an individual or entity earns from the sale or disposal of a capital asset. This tax is not levied on the total sale price of the asset but rather on the capital gain, which is the difference between the asset’s acquisition cost (or “base cost”) and its sale price.... Act (Cap 23:01).Capital gains taxCapital Gains Tax (CGT) is a tax imposed on the profit an individual or entity earns from the sale or disposal of a capital asset. This tax is not levied on the total sale price of the asset but rather on the capital gain, which is the difference between the asset’s acquisition cost (or “base cost”) and its sale price.... is levied at a rate of 20 percent of the net gain realised on the disposal of unlisted marketable securities acquired on or after February 1, 2009, whereas such securities acquired before February 1, 2009 are subject to tax at five percent on the gross proceeds. The disposal of shares in companies listed on the Zimbabwe Stock Exchange (ZSE) is subject to a flat rate of one percent of the gross proceeds.
a rate of 20 percent of the net gain realised on the disposal of unlisted marketable securities acquired on or after February 1, 2009, whereas such securities acquired before February 1, 2009 are subject to tax at five percent on the gross proceeds. The disposal of shares in companies listed on the Zimbabwe Stock Exchange (ZSE) is subject to a flat rate of one percent of the gross proceeds.The gross proceeds of the disposal of immovable property acquired before February 1, 2009 is subject to tax at five percent, whereas the net gain realised on the disposal of immovable property acquired on or after February 1 is subject to 20 percent tax.
D. Deductible expenses
Generally, any revenue expense which is incurred for trading purposes during the year of assessment is deductible.
E. Carry forward losses
Trading losses may be carried forward for a period of six years. Losses arising from mining operations may be carried forward without any restriction.
a period of six years. Losses arising from mining operations may be carried forward without any restriction.Capital losses arising from the disposal of immovable assets or marketable securities may be carried forward without restriction.
F. Tax treatyA Double Taxation Agreement (DTA), also known as a Double Taxation Treaty (or a Tax Treaty), is an international tax treaty between two or more countries that aims to prevent individuals or businesses from being taxed twice on the same income. With globalisation and the increase in cross-border economic activities, DTAs have become essential tools for promoting trade, investment, and... network and transfer pricingTransfer pricing is a fundamental concept in international taxation that defines the pricing methods and rules applied to transactions between related entities within a multinational enterprise (MNE). In the context of tax regulations, it governs how prices for goods, services, or intangibles (such as intellectual property) are set when these items are exchanged between different branches, subsidiaries, or affiliates of...
Zimbabwe has entered into double tax agreements with Bulgaria, Canada, France, Germany, Kuwait, Malaysia, Mauritius, the Netherlands, Norway, Poland, South Africa, Sweden and the United Kingdom.
Zimbabwe does not have specific transfer pricingTransfer pricing is a fundamental concept in international taxation that defines the pricing methods and rules applied to transactions between related entities within a multinational enterprise (MNE). In the context of tax regulations, it governs how prices for goods, services, or intangibles (such as intellectual property) are set when these items are exchanged between different branches, subsidiaries, or affiliates of... legislation. However, transfer pricingTransfer pricing is a fundamental concept in international taxation that defines the pricing methods and rules applied to transactions between related entities within a multinational enterprise (MNE). In the context of tax regulations, it governs how prices for goods, services, or intangibles (such as intellectual property) are set when these items are exchanged between different branches, subsidiaries, or affiliates of... is dealt with under the general anti-avoidance provisions, in terms of which the Commissioner-General has the power to make adjustments to inter alia any transaction, operation or scheme which has created rights or obligations which would not normally be created between persons dealing at arm’s length under a transaction, operation or scheme of the nature of the transaction, operation or scheme in question.
in terms of which the Commissioner-General has the power to make adjustments to inter alia any transaction, operation or scheme which has created rights or obligations which would not normally be created between persons dealing at arm’s length under a transaction, operation or scheme of the nature of the transaction, operation or scheme in question.G. Withholding taxes
Withholding tax is applicable on specified payments made to resident and non-resident companies. In respect of payments to resident companies, this tax is generally an advance tax.
In respect of payments to resident companies, this tax is generally an advance tax.The withholding tax rates applicable to payments to non-residents may be reduced or eliminated in terms of a double tax agreement entered into between Zimbabwe and the recipient’s country of residence.
in terms of a double tax agreement entered into between Zimbabwe and the recipient’s country of residence.A final withholding tax of 15 percent applies to dividends paid to both resident and non-resident companies. Securities listed on the ZSE qualify for a reduced dividend withholding tax rate of 10 percent. Dividends paid by an industrial park developer are exempt from withholding tax.Royalties paid to a non-resident are subject to 15 percent withholding tax. No withholding tax is levied on interest paid to non-residents, but interest earned by a resident on fixed-term deposits (having a tenure of at least 90 days) is subject to 5 percent withholding tax and other interest is subject to 15 percent withholding tax.
a non-resident are subject to 15 percent withholding tax. No withholding tax is levied on interest paid to non-residents, but interest earned by a resident on fixed-term deposits (having a tenure of at least 90 days) is subject to 5 percent withholding tax and other interest is subject to 15 percent withholding tax.There is no branch profit tax in Zimbabwe, but a 15 percent withholding tax is levied on remittances of allocable expenditure of a technical, administrative, managerial or consultative nature by a Zimbabwean branch to its non-resident parent.
in Zimbabwe, but a 15 percent withholding tax is levied on remittances of allocable expenditure of a technical, administrative, managerial or consultative nature by a Zimbabwean branch to its non-resident parent.A 10 percent withholding applies to every payment over US$250 to resident contractual suppliers that do not have a tax clearance certificate. This is not a final tax.IV. VAT
VAT at a standard rate of 15 percent is imposed on every taxable supply of goods and services made in Zimbabwe, and on every importation of goods into Zimbabwe or taxable supply of any imported service. Generally imported services would only subject to VAT if the recipient of an imported service is not a registered operator or the service is not for making taxable supplies.
a standard rate of 15 percent is imposed on every taxable supply of goods and services made in Zimbabwe, and on every importation of goods into Zimbabwe or taxable supply of any imported service. Generally imported services would only subject to VAT if the recipient of an imported service is not a registered operator or the service is not for making taxable supplies.Any person who makes taxable supplies of goods or services with an annual turnover in excess of US$60 000 should register for VAT purposes as a “registered operator”.
in excess of US$60 000 should register for VAT purposes as a “registered operator”.V. Individual or personal taxation (employment income)
Individuals who are “ordinarily resident” in Zimbabwe are subject to income tax in respect of taxable incomeThe tax base is a fundamental concept in taxation, representing the total amount of economic activity or assets upon which a tax is levied. It is the foundation upon which governments calculate the amount of tax owed, based on factors like income, property value, sales, or corporate profits. Understanding the tax base is essential for tax professionals, businesses, and policymakers,... from a source within or deemed to be within Zimbabwe. Tax is levied at a progressive scale with the maximum rate of 45 percent. In addition, the three percent AIDS levy also apply to individuals.
in Zimbabwe are subject to income tax in respect of taxable incomeThe tax base is a fundamental concept in taxation, representing the total amount of economic activity or assets upon which a tax is levied. It is the foundation upon which governments calculate the amount of tax owed, based on factors like income, property value, sales, or corporate profits. Understanding the tax base is essential for tax professionals, businesses, and policymakers,... from a source within or deemed to be within Zimbabwe. Tax is levied at a progressive scale with the maximum rate of 45 percent. In addition, the three percent AIDS levy also apply to individuals.The term “ordinarily resident” is not defined in the Income TaxIncome Tax is a direct levy imposed by governments on the income generated by individuals, corporations, and other entities within a specific jurisdiction. It serves as a major source of revenue for governments and funds various public expenditures, such as infrastructure projects, healthcare, education, national security, and welfare programs. The tax is generally calculated as a percentage of the taxable... Act, but in terms of the common-law interpretation which applies, an individual is ordinarily resident in a country:
in the Income TaxIncome Tax is a direct levy imposed by governments on the income generated by individuals, corporations, and other entities within a specific jurisdiction. It serves as a major source of revenue for governments and funds various public expenditures, such as infrastructure projects, healthcare, education, national security, and welfare programs. The tax is generally calculated as a percentage of the taxable... Act, but in terms of the common-law interpretation which applies, an individual is ordinarily resident in a country:
• which is his/her usual place of residence; or
Employment income earned by a non-resident individual from a source within or deemed to be within Zimbabwe, is subject to income tax in Zimbabwe, and levied in terms of the PAYE system. Employment income is deemed to be from a source within Zimbabwe if:
a non-resident individual from a source within or deemed to be within Zimbabwe, is subject to income tax in Zimbabwe, and levied in terms of the PAYE system. Employment income is deemed to be from a source within Zimbabwe if:
• it is from services rendered during temporary absence (not more than 183 days) from Zimbabwe;
• it is payment for services rendered to the Zimbabwean government.
Employees and employers are required to make monthly social security contributions to the National Social Security Authority (NSSA). The NSSA operates two schemes: the National Pension Scheme (NPS), to which both employers and employees are to contribute three percent of basic salary per month, with a cap of US$200 and the Accident Prevention and Workers’ Compensation Scheme (APWCS) or Workers’ Compensation Insurance Fund/Scheme (WCIF), to which the employer is obliged to contribute. The employer contribution rate is calculated using a risk factor dependent on the type of industry the employer is involved in.
a cap of US$200 and the Accident Prevention and Workers’ Compensation Scheme (APWCS) or Workers’ Compensation Insurance Fund/Scheme (WCIF), to which the employer is obliged to contribute. The employer contribution rate is calculated using a risk factor dependent on the type of industry the employer is involved in.Employers are also obliged to contribute one percent of the gross wage and salary bill as a manpower development levy and 0.5 percent of gross salaries as a standards development levy.
a manpower development levy and 0.5 percent of gross salaries as a standards development levy.VI. Tax incentives/favourable tax regimes
A licensed investor who holds an investment licence for Export Processing Zones (EPZ) issued by the Zimbabwe Investment Authority (ZIA) under the ZIA Act qualifies for an initial five year tax holiday. After this period, the standard corporate income taxCorporate Tax refers to the tax imposed by governments on the income or capital of corporations. Corporations, considered separate legal entities, are taxed on their profits, meaning the income generated from their operational activities, investments, and other financial undertakings. This tax is generally a key revenue source for governments, helping to fund public services, infrastructure, and other essential functions. The... rate of 25 percent applies.An industrial park developer qualifies for an initial five year tax holiday. Subsequently, the normal corporate taxCorporate Tax refers to the tax imposed by governments on the income or capital of corporations. Corporations, considered separate legal entities, are taxed on their profits, meaning the income generated from their operational activities, investments, and other financial undertakings. This tax is generally a key revenue source for governments, helping to fund public services, infrastructure, and other essential functions. The... rate of 25 percent applies. An “industrial park” is defined as any premises or area approved by the Minister by statutory instrument and in which goods or components intended for export from Zimbabwe are manufactured.
in which goods or components intended for export from Zimbabwe are manufactured.Manufacturing operations of which 50 percent or more of its total manufacturing output for a year is exported from Zimbabwe, is subject to a corporate income taxCorporate Tax refers to the tax imposed by governments on the income or capital of corporations. Corporations, considered separate legal entities, are taxed on their profits, meaning the income generated from their operational activities, investments, and other financial undertakings. This tax is generally a key revenue source for governments, helping to fund public services, infrastructure, and other essential functions. The... rate of 20 percent.
a year is exported from Zimbabwe, is subject to a corporate income taxCorporate Tax refers to the tax imposed by governments on the income or capital of corporations. Corporations, considered separate legal entities, are taxed on their profits, meaning the income generated from their operational activities, investments, and other financial undertakings. This tax is generally a key revenue source for governments, helping to fund public services, infrastructure, and other essential functions. The... rate of 20 percent.Business operations in Growth Point Areas, designated as such by the Minister by notice in the Gazette, are entitled to a special initial allowances and an investment allowance of 15 percent on the cost incurred inrespect of new commercial or industrial buildings or staff housing, additions or alterations to such buildings and new machinery and utensils.
in Growth Point Areas, designated as such by the Minister by notice in the Gazette, are entitled to a special initial allowances and an investment allowance of 15 percent on the cost incurred inrespect of new commercial or industrial buildings or staff housing, additions or alterations to such buildings and new machinery and utensils.An approved company commencing manufacturing operations in a new project in a Growth Point Area is subject to corporate income taxCorporate Tax refers to the tax imposed by governments on the income or capital of corporations. Corporations, considered separate legal entities, are taxed on their profits, meaning the income generated from their operational activities, investments, and other financial undertakings. This tax is generally a key revenue source for governments, helping to fund public services, infrastructure, and other essential functions. The... at 10 percent and a person engaged in a new project providing infrastructure in a Growth Point Area is subject to corporate income taxCorporate Tax refers to the tax imposed by governments on the income or capital of corporations. Corporations, considered separate legal entities, are taxed on their profits, meaning the income generated from their operational activities, investments, and other financial undertakings. This tax is generally a key revenue source for governments, helping to fund public services, infrastructure, and other essential functions. The... at 15 percent.
in a new project in a Growth Point Area is subject to corporate income taxCorporate Tax refers to the tax imposed by governments on the income or capital of corporations. Corporations, considered separate legal entities, are taxed on their profits, meaning the income generated from their operational activities, investments, and other financial undertakings. This tax is generally a key revenue source for governments, helping to fund public services, infrastructure, and other essential functions. The... at 10 percent and a person engaged in a new project providing infrastructure in a Growth Point Area is subject to corporate income taxCorporate Tax refers to the tax imposed by governments on the income or capital of corporations. Corporations, considered separate legal entities, are taxed on their profits, meaning the income generated from their operational activities, investments, and other financial undertakings. This tax is generally a key revenue source for governments, helping to fund public services, infrastructure, and other essential functions. The... at 15 percent.Companies engaged in an approved BOOT or BOT arrangement qualifies for an initial five year tax holiday. In the subsequent five years, the income is taxable at a reduced tax rate of 15 percent. Thereafter, the income is taxable at the normal corporate taxCorporate Tax refers to the tax imposed by governments on the income or capital of corporations. Corporations, considered separate legal entities, are taxed on their profits, meaning the income generated from their operational activities, investments, and other financial undertakings. This tax is generally a key revenue source for governments, helping to fund public services, infrastructure, and other essential functions. The... rate of 25 percent.
in an approved BOOT or BOT arrangement qualifies for an initial five year tax holiday. In the subsequent five years, the income is taxable at a reduced tax rate of 15 percent. Thereafter, the income is taxable at the normal corporate taxCorporate Tax refers to the tax imposed by governments on the income or capital of corporations. Corporations, considered separate legal entities, are taxed on their profits, meaning the income generated from their operational activities, investments, and other financial undertakings. This tax is generally a key revenue source for governments, helping to fund public services, infrastructure, and other essential functions. The... rate of 25 percent.Operators of a tourist facility in an approved tourist development zone qualify for an initial five year tax holiday. After this period, the normal corporate taxCorporate Tax refers to the tax imposed by governments on the income or capital of corporations. Corporations, considered separate legal entities, are taxed on their profits, meaning the income generated from their operational activities, investments, and other financial undertakings. This tax is generally a key revenue source for governments, helping to fund public services, infrastructure, and other essential functions. The... rate of 25 percent applies.
a tourist facility in an approved tourist development zone qualify for an initial five year tax holiday. After this period, the normal corporate taxCorporate Tax refers to the tax imposed by governments on the income or capital of corporations. Corporations, considered separate legal entities, are taxed on their profits, meaning the income generated from their operational activities, investments, and other financial undertakings. This tax is generally a key revenue source for governments, helping to fund public services, infrastructure, and other essential functions. The... rate of 25 percent applies.Farming operations are entitled to capital deductions in respect of expenditure on fencing, clearing and stamping land, sinking boreholes and wells and aerial and geophysical surveys.
in respect of expenditure on fencing, clearing and stamping land, sinking boreholes and wells and aerial and geophysical surveys.A company holding a special mining lease issued under the Mines and Minerals Act is subject to corporate taxCorporate Tax refers to the tax imposed by governments on the income or capital of corporations. Corporations, considered separate legal entities, are taxed on their profits, meaning the income generated from their operational activities, investments, and other financial undertakings. This tax is generally a key revenue source for governments, helping to fund public services, infrastructure, and other essential functions. The... at a reduced tax rate of 15 percent. Mining companies are also entitled to carry forward losses indefinitely and deduct capital expenditure on exploration, development and operations.VII. Compliance/Administration
The corporate taxCorporate Tax refers to the tax imposed by governments on the income or capital of corporations. Corporations, considered separate legal entities, are taxed on their profits, meaning the income generated from their operational activities, investments, and other financial undertakings. This tax is generally a key revenue source for governments, helping to fund public services, infrastructure, and other essential functions. The... year in Zimbabwe is the calendar year. With approval from the Commissioner-General, a company may have an accounting year which is different from the corporate taxCorporate Tax refers to the tax imposed by governments on the income or capital of corporations. Corporations, considered separate legal entities, are taxed on their profits, meaning the income generated from their operational activities, investments, and other financial undertakings. This tax is generally a key revenue source for governments, helping to fund public services, infrastructure, and other essential functions. The... year.
in Zimbabwe is the calendar year. With approval from the Commissioner-General, a company may have an accounting year which is different from the corporate taxCorporate Tax refers to the tax imposed by governments on the income or capital of corporations. Corporations, considered separate legal entities, are taxed on their profits, meaning the income generated from their operational activities, investments, and other financial undertakings. This tax is generally a key revenue source for governments, helping to fund public services, infrastructure, and other essential functions. The... year.Corporate taxpayers must submit an annual income taxIncome Tax is a direct levy imposed by governments on the income generated by individuals, corporations, and other entities within a specific jurisdiction. It serves as a major source of revenue for governments and funds various public expenditures, such as infrastructure projects, healthcare, education, national security, and welfare programs. The tax is generally calculated as a percentage of the taxable...tax returnA Tax Return is a formal statement filed by an individual or entity that details income, expenses, and other pertinent tax information to a tax authority. Its primary purpose is to assess tax liability, determine refunds owed, or highlight outstanding taxes due. Tax returns may include information about earnings, capital gains, allowable deductions, and credits, depending on the tax regulations... by not later than four months from the end of its corporate taxCorporate Tax refers to the tax imposed by governments on the income or capital of corporations. Corporations, considered separate legal entities, are taxed on their profits, meaning the income generated from their operational activities, investments, and other financial undertakings. This tax is generally a key revenue source for governments, helping to fund public services, infrastructure, and other essential functions. The... year, supported by financial statements. Companies on the self-assessment system need not submit financial statements unless specifically requested to.
A “return for provisional tax payment”, containing the estimated taxable incomeThe tax base is a fundamental concept in taxation, representing the total amount of economic activity or assets upon which a tax is levied. It is the foundation upon which governments calculate the amount of tax owed, based on factors like income, property value, sales, or corporate profits. Understanding the tax base is essential for tax professionals, businesses, and policymakers,... for provisional tax purposes, should be submitted on a quarterly basis. For taxpayers with a December 31 year end, the due days are March 25, June 25, September 25 and December 20.In respect of individuals, the tax year coincides with the calendar year. An individual whose income either consists entirely of employment income or is subject to a nil rate of tax, is not required to submit an income taxIncome Tax is a direct levy imposed by governments on the income generated by individuals, corporations, and other entities within a specific jurisdiction. It serves as a major source of revenue for governments and funds various public expenditures, such as infrastructure projects, healthcare, education, national security, and welfare programs. The tax is generally calculated as a percentage of the taxable...tax returnA Tax Return is a formal statement filed by an individual or entity that details income, expenses, and other pertinent tax information to a tax authority. Its primary purpose is to assess tax liability, determine refunds owed, or highlight outstanding taxes due. Tax returns may include information about earnings, capital gains, allowable deductions, and credits, depending on the tax regulations..., unless an employee changed jobs or was not employed for a full year. In such a case he is obliged to submit a return.VAT returns are due by the 25th of the following month and returns for PAYE are due by 10th of the following month. Withholding tax returnsA Tax Return is a formal statement filed by an individual or entity that details income, expenses, and other pertinent tax information to a tax authority. Its primary purpose is to assess tax liability, determine refunds owed, or highlight outstanding taxes due. Tax returns may include information about earnings, capital gains, allowable deductions, and credits, depending on the tax regulations... are due within 10 days of the distribution or payment.
VIII. Exchange control
Zimbabwe has limited exchange controls regulations, with mainly capital account transactions requiring exchange control approval. Commercial banks monitor ongoing compliance and may request additional information in respect of transactions and or refer any matter to exchange control.
in respect of transactions and or refer any matter to exchange control.IX. Document retention
For More Information
Celia Becker is Tax AdvisorA Tax Advisor is a professional who provides specialised advice to individuals, businesses, and organisations on various tax-related matters. They play a crucial role in guiding clients through complex tax laws and ensuring compliance with the latest regulations while identifying opportunities for tax efficiency. Tax Advisors must stay updated on legislative changes and understand the impact of international tax treaties,... at ENSafrica in Johannesburg and she may be contacted by email at cbecker@ensafrica.com or by telephone at +27 11 269 7758.
in Johannesburg and she may be contacted by email at cbecker@ensafrica.com or by telephone at +27 11 269 7758.
Responses