ZIMBABWE

(a) CORPORATION TAX
 

Corporate Tax on Companies, Private Business Corporations and Trusts

The nominal corporate tax rate is currently 35%.

Various tax concessions and allowances are offered to the investor including special allowances in terms of taxation agreements negotiated with other countries. As a result of these, effective tax rates are reduced. It is recommended that these should be verified through the Department of Taxes.

Companies are allowed to carry over losses to be offset against future profits for six years and in the case of mining operations for an indefinite period.

Branch profits tax levied on branches of foreign registered companies was abolished from January 1999.

Existing companies which export 50% or more of their manufacturing output wilt be taxed at a rate of 27% (8% below the prevailing rate of corporate tax) with effect from January 1999.

New companies that commence manufacturing production after January 1999 and which export at least 40% of their manufacturing output will be taxed at a rate of 25% (10% below the prevailing rate of corporate tax).

Manufacturing companies, which can satisfy the Commissioner of Taxes that they have employed an additional fifty permanent employees or increased the permanent work force by 25% during any year of assessment, will from January 1999 be entitled to a double deduction from gross income in regard to the remuneration of those employees.

Corporate Tax on Growth Points and Export Processing Zones

New manufacturing operations located in designated Growth Point areas qualify for a concessionary rate of 10% for the first five years of operation. For more details of other incentives see section on Growth Point areas.

Operations located in an Export Processing Zone are initially entitled to a five-year tax holiday after which tax is charged at a rate of 15% for the life of the project. For more detail of other incentives see section on Export Processing Zones.

Approved Build, Operate & Transfer (BOT) projects or infrastructure projects are taxed at 15%.

Sales Tax and Import Tax

The general sale tax rate for goods and services is 15% whilst 25% is payable on consumer durables, luxury goods and office furniture. Government is considering replacing sales tax altogether with Value Added Tax.