Tax returns and compliance
Termination of residence
Economic employer approach
Types of taxable compensation
Salary earned from working abroad
Taxation of investment income and capital gains
Additional capital gains tax (CGT) issues and exceptions
General deductions from income
Tax reimbursement methods
Calculation of estimates/pre-payments/withholding
Relief for foreign taxes
General tax credits
Sample tax calculation
When are tax returns due? That is, what is the tax return due date?
Employees earning income from one source throughout the year are not required to file a tax return. In all other cases returns have to be filed by 30 April of the subsequent tax year. Specifically, within four months after the end of the year of earning.
What is the tax year-end?
31 December of each year.
What are the compliance requirements for tax returns in Zimbabwe?
Where applicable, the returns should be filed by 30 April of the year following year of operation.
What are the current personal income tax rates in Zimbabwe?
Aggregate annual income is taxed as follows:
|Add Aids Levy: 3% of tax|
|Head of Household|
|Gains on immovable assets and marektable securities sold||20%|
|Qualified dividends (dividends from domestic corporations, and certain foreign corporations)||15%|
As per the table above.
25 percent plus Aids Levy of 3 percent giving an effective rate of 25.75 percent.
For the purposes of taxation, how is an individual defined as a resident of Zimbabwe?
Aggregate presence in Zimbabwe exceeding 183 days per calendar year.
Is there, a de minimus number of days rule when it comes to residency start and end dates? For example, taxpayers can’t come back to the host country for more than 10 days after their assignments end and they repatriate.
There are no such rules.
What if the assignee enters the country before his/her assignment begins?
Assignee can enter the country as a tourist but will not be allowed to carry out any work until all the conditions have been fulfilled.
Are there any tax compliance requirements when leaving Zimbabwe?
Assignee should seek and obtain a tax clearance from the Zimbabwe Revenue Authority.
What if the assignee comes back for a trip after residency has terminated?
Permissible, as a tourist.
Do the immigration authorities in Zimbabwe provide information to the local taxation authorities regarding when a person enters or leaves the country?
Not as a mandatory requirement but there is a general understanding that Government Departments can exchange information.
Will an assignee have a filing requirement in the host country after he/she leaves the country and repatriates?
It is possible if the assignee continues to earn income from a Z|imbabwean source, for instance rental income from immovable property situated in Zimbabwe.
Do the taxation authorities in Zimbabwe adopt the economic employer approach to interpreting the Income from Employment article (Article 15) of the xxx treaty? If no, are the taxation authorities in Zimbabwe considering the adoption of this interpretation of economic employer in the future?
No and we are not aware of any interest to adopt this in the near future.
Is there a de minimus number of days before the local taxation authorities will apply the economic employer?
What categories are subject to income tax in general situations?
Remuneration in the form of salaries and benefits.
Are there any areas of income that are exempt from taxation in Zimbabwe? If so, please provide a general definition of these areas.
Income that is specifically provided to be exempt in the legislation.
Retirement pension accruals to persons over fifty five years of ageThe first US$3 000 of rental income accruing to persons over fifty five years of age.
Contributions, subject to a maximum annual threshold are deductible.
No tax deduction
Taxable in employee’s hands if provided by employer.
Taxable, such as interest on soft loans provided by the employer, and free usage of vehicles supplied by employer.
Initial recruitment and repatriation costs are deductible.
If business travel, then deductible.
Are there any concessions made for assignees in Zimbabwe?
There are no concessions.
Is salary earned from working abroad taxed in Zimbabwe? If so, how?
No, but may be taxable if salary earned during temporary (not exceeding 183 days per tax year) absence from Zimbabwe.
Are investment income and capital gains taxed in Zimbabwe? If so, how?
Yes, investment income is taxable at an effective rate of 25.75 percent (being 25% plus 3% aids levy) while capital gains on specified assets are taxable at 20 percent.
15 percent if from an unlisted entity and 10 percent if from a listed entity if accuring to a taxpayer other than a local company.
Bank interest is subject to withholding tax of 15 percent, other interest is taxed at 25 percent plus 3% Aids Levy.
25 percent plau 3% Aids Levy.
Taxed as employment income.
|Residency status||Taxable at:|
Taxable at normal business rates and losses deductible.
Not deductible, but scrapping allowances may be available.
If provided by employer, benefit taxable.
Depending on nature, exempt and not deductible.
Are there additional capital gains tax (CGT) issues in Zimbabwe? If so, please discuss.
No, there are no additional capital gains tax issues in Zimbabwe.
Are there capital gains tax exceptions in the Zimbabwe? If so, please discuss.
Yes, certain proceeds are exempt per section 10 of the Capital Gains Tax Act.
Any change in the ownership of a specified asset will be deemed to be a disposal, and would therefore be subject to capital gains tax.
What are the general deductions from income allowed in Zimbabwe?
Expenses and losses to the extent to which they are incurred in the production of income, excluding capital expenses per section 15 of the Income Tax Act (Chapter 23:06).
What are the tax reimbursement methods generally used by employers in Zimbabwe?
Through the final deduction system of administering employee’s tax; which is the responsibility of the employer. However where the taxpayer has filed a tax return, then reimbursement would be through an assessment.
How are estimates/pre-payments/withholdings of tax handled in Zimbabwe? For example: Pay-As-You-Earn (PAYE), Pay-As-You-Go (PAYG), etc.
Employer required administering deduction from employee remuneration on a monthly basis.
When are estimates/pre-payments/withholdings of tax due in Zimbabwe? For example, monthly, annually, both, etc.
These remittances are due on a monthly basis and should be paid in most cases by the 10th of the month following month of withholding.
Is there any relief for foreign taxes in Zimbabwe?
Yes, subject to a maximum relief which does not exceed the Zimbabwean tax chargeable on the same income.
What are the general tax credits that may be claimed in Zimbabwe? Please list below.
|Moving expense reimbursement||1,000||1,000||1,000|
|Interest income from non-local sources||500||500||500|
Calculation of taxable income
|Days in Zimbabwe||0||0||0|
|Earned income subject to income tax|
|Net housing allowance||1,200||1,200||1,200|
|Moving expense reimbursement||1,000||1,000||1,000|
|Total earned income||42,400||42,400||42,400|
|Moving expenses reimbursement||(1,000)||(1,000)||(1,000)|
|Total taxable income||35,600||35,600||35,600|
Calculation of tax liability
|Taxable income as above||35,600||35,500||35,500|
|Alternative minimum tax||0||0||0|
|Foreign tax credits||0||0||0|
|Total federal income tax||0||0||0|
|Social security tax||0||0||0|
|Total Zimbabwe taxes||6,953||10,538||10,589|
|Total Taxable income||42,400.00|
|Maximum pension contributions||(5,400.00)|
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