Zimbabwe flag Zimbabwe: Business Environment

Tax rates in Zimbabwe

Tax Rates

Consumption Taxes

Nature of the Tax
Value Added Tax (VAT)
Tax Rate
14.5%
Reduced Tax Rate
Certain goods or services are zero-rated, including exports of goods (other than unbeneficiated hides and unbeneficiated platinum) and services that would otherwise be standard rated; certain supplies of goods that are used exclusively in an export country; international transport of goods and services; sales of businesses as going concerns to registered persons; gold sales to the central bank, Fidelity Printers and Refiners, and commercial banks; services supplied outside Zimbabwe to foreign head offices by Zimbabwean branches or to nonresident persons that are outside Zimbabwe when they are rendered tourism-related services (other than accommodation) rendered by designated tourist facilities, such as hotels, tour operators and car-hire companies; intellectual property rights for use outside Zimbabwe; certain foodstuffs except rice, margarine, cereals, mahewu, pork, beef, fish, chicken and potatoes, which are now exempt; supply of domestic electricity; certain goods used for agricultural purposes, such as animal feed, fertilizers, seed, animal remedies, pestiides, plants, tractors and, when exported, specified agricultural implements; prescription medicines; building bricks; goods used by disabled persons; fixed charges on commercial and domestic electricity; supply of pipeline transportation services; livestock.

Exempt items include accommodation provided to local tourists for period 1 July 2021 to 30 June 2022; food and beverages served at places of accommodation, shuttle and car rental services, sport fishing, safari operations, recreational services provided by companies registered with the Zimbabwe Tourism Authority, marine and ferry services, and touring and exploring national museum and monuments provided to local tourists (for period 1 July 2021 to 31 July 2022); local supplies of financial services; medical services; educational services by institutions registered under the ministry of education or higher education; transport of fare-paying passengers by railway or road; supplies of donated goods or services by nonprofit (charitable) bodies; supplies of immovable property located outside Zimbabwe; rental of residential accommodation; staff accommodation; water supplied through a pipe for domestic use; owners’ rates charged by a local authority; commission charges on tobacco sales on auction floors; tobacco supplied on auction floors; sale and import of leaf tobacco; petroleum oils; revenue arising from the operation of a temporary casino license in accordance with the terms of the lotteries and gaming act; protective farming clothing, including gumboots, raincoats and gloves used for agricultural purposes; eggs, vegetables, fruits, rice, margarine, lactose and mahewu.
Other Consumption Taxes
Excise duties are levied on alcohol (USD 2 per litre for spirits, USD 0.50 per litre for wine), tobacco (25% + USD 5 per 100 sticks), energy drinks (USD 0.05 per litre) and petroleum products.
A Special Excise Duty is charged on the change of ownership of locally registered second-hand motor vehicles at specified rates.

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Corporate Taxes

Company Tax
24.72% (standard 24% rate +  3% AIDS levy)
Tax Rate For Foreign Companies
Zimbabwe adopts a territorial system of taxation: income from a source within, or deemed to be within, Zimbabwe will be subject to tax in Zimbabwe unless a specific exemption is available.
A company is resident in Zimbabwe if its central management and control is situated in the country.
A 15% withholding tax is imposed on branches for any payment made in respect of head office charges. Moreover, the amount of fees charged by the head office to the Zimbabwe branch is capped at 1% of total expenses. Furthermore, the possibility to remit administration and management fees is limited to 2% of turnover.
Capital Gains Taxation
Capital gains tax has different rates: 20% of proceeds from the sales of immovable properties (5% if acquired before February 2009); 20% on unlisted marketable securities' sale proceeds (5% if acquired before February 2009); 1% on marketable securities that are listed.
Main Allowable Deductions and Tax Credits
The cost and finance charges of machinery, implements, and other articles used to produce income is deductible in four equal annual allowances. 25% of the construction cost of industrial buildings qualify for an allowance in the year they enter service, plus an annual allowance of 25% for each year following the year of construction. Start-up expenses may be deducted if incurred within 18 months from the start of activities. A portion of the overall interest may be disallowed if the 3:1 debt-to-equity ratio is exceeded. Bad debts written off may be claimed, but not a provision for bad debts. Certain donations to charities and educational bodies are also deductible (with varying limits). Entertainment expenses, fines, penalties and taxes are generally not deductible. Costs of software acquisition and development qualify for capital allowances at 25% per year over four years. A double deduction is granted on expenditure incurred to develop export markets.
Assessed tax losses may be carried forward for up to six years if the company is still active, whereas the carryback of losses is not allowed.
Other Corporate Taxes
Other taxes include: stamp duty, excise duty, property taxes are levied by cities, towns, and rural councils, transfer tax (on the acquisition value of a property, with rates varying according to the value of the property, up to 4% of the value above USD 50,000), capital gains tax, standards development fund (0.5% of their quarterly gross wage bill), workmen's compensation (from 2% to 11% according to the level of risk), training levy (1% of the gross wage bill), social contributions (4.5% of basic salary, with a salary cap of ZWL 5,000 per month). An automated financial transactions tax is imposed at a rate of USD 0.05 per transaction on transactions exceeding USD 10, including transactions initiated on mobile platforms.
A bookmaker’s tax applies to persons licensed or required to be licensed under the Betting and Totalisator Control Act. The tax is 3% of the gross monthly takings.
Other Domestic Resources
Zimbabwe Revenue Authority (ZIMRA)
Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

Country Comparison For Corporate Taxation

  Zimbabwe Sub-Saharan Africa United States Germany
Number of Payments of Taxes per Year 51.0 36.6 10.6 9.0
Time Taken For Administrative Formalities (Hours) 242.0 284.8 175.0 218.0
Total Share of Taxes (% of Profit) 31.6 47.3 36.6 48.8

Source: Doing Business, Latest available data.

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Individual Taxes

Tax Rate

Personal income tax 2022 brackets
ZWL 0 to 300,000 0%
ZWL 360,001 to 720,000 0 + 20% for each ZWL above 300,000
ZWL 720,001 to 1,440,000 84,000 + 25% for each ZWL above 720,000
ZWL 1,440,001 to 2,880,000 264,000 + 30% for each ZWL above 1,440,000
ZWL 2,880,000 to 6,000,000 696,000 + 35% for each ZWL above 2,880,000
Above ZWL 6,000,000 1,788,000 + 40% for each ZWL above 6,000,000
Income of individual from trade and investments 24% + AIDS levy
AIDS levy 3% of the total tax liability calculated
(top effective rate for employment income at 41.2%; 24.72% for selfemployed)
Allowable Deductions and Tax Credits
Employees may deduct contributions of up to ZWL 390,000 per year to an approved pension, retirement annuity, and National Social Security Scheme (NSSS) fund registered in the country.
Travel, entertainment, and motor vehicle expenses are deductible if the employee proves that they were incurred to produce taxable income.
Charitable contributions to registered welfare and educational institutions may be deductible.
Special exemptions and credits apply to individuals over 55 years of age.
Special Expatriate Tax Regime
The Zimbabwean tax system is currently based on the territorial system, hence the income derived or deemed to be derived from sources within Zimbabwe is subject to tax.
Non-residents who do not have a place of business in Zimbabwe may be subject to withholding tax.

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
Zimbabwe's tax agreements list
Withholding Taxes
Dividends: 10% (if distributed by a company listed on the Zimbabwe Stock Exchange to a non-resident)/15%; Interests: 0% (non-resident)/15% (resident); Royalties: 0% (resident)/15% (non-resident).
Bilateral Agreement
The United Kingdom and Zimbabwe are bound by a double taxation treaty.

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Latest Update: November 2022

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