Zimbabwe: Business Environment

Accounting Rules

Tax Year: From January 1 to December 31.
Accounting Standards: Zimbabwe has adopted the International Financial Reporting Standards (IFRS). Current tax legislation does not specify the accounting framework that should be used. The new tax law on income advises taht generally accepted accounting practices be applied.
Accounting Regulation Bodies: Public Accountant and Auditors Board (PAAB)
Accounting Reports: A company is required to prepare financial statements at the end of the fiscal year. These financial statements should show a true picture of the state of affairs of the company (and its subsidiaries, in the case of a group) and include a balance sheet.
Publication Requirements: All companies are required to prepare their financial statements annually, regardless of any audit exemption, and in most cases, financial reporting standards are prescribed.
Only public companies and foreign branches are required to file financial statements with the Business Register, so that they are accessible to the public.
Professional Accountancy Bodies: Chartered Association of Certified Accountants incorporated by Royal Charter in the United Kingdom (ACCA) - Zimbabwe , Chartered Association of Certified Accountants incorporated by Royal Charter in the United Kingdom (ACCA) - Zimbabwe
Chartered Institute of Management Accountants incorporated by Royal Charter in the United Kingdom (CIMA) - Zimbabwe , Chartered Institute of Management Accountants incorporated by Royal Charter in the United Kingdom (CIMA) - Zimbabwe
Institute of Chartered Accountants of Zimbabwe (ICAZ) , Institute of Chartered Accountants of Zimbabwe (ICAZ)
Institute of Chartered Secretaries and Administrators in Zimbabwe , Institute of Chartered Secretaries and Administrators in Zimbabwe
Institute of Certified Public Accountants of Zimbabwe , Institute of Certified Public Accountants of Zimbabwe
Certification and Auditing: All audits must comply with International Standards on Auditing (ISA) and must be carried out by accountants and certified auditors which are members of ACCA or ICAZ. For more information please see the websites of PriceWaterHouseCoppers, Ernst & Young, KPMG.
Accounting News

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.

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.

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.

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: Zimbabwe and Mauritius concluded a Double Taxation Agreement.

Sources of Fiscal Information

Tax Authorities: Overview of Zimbabwe's tax measures in response to Covid-19
Zimbabwe Revenue Authority (ZIMRA)
Other Domestic Resources: Ministry of Finance and Economic Development
Zimbabwe Investment Agency

Intellectual Property

National Organisations: The national organization in charge of intellectual property is the Zimbabwe Intellectual Property Office (ZIPO) within the Ministry of Justice, Department of the acts of corporate and intellectual property.
Regional Organisations: Zimbabwe is a member of the African Regional Industrial Property Organization (ARIPO).
International Membership: Member of the WIPO (World Intellectual Property Organization)
Signatory to the Paris Convention For the Protection of Intellectual Property

National Regulation and International Agreements

Type of property and law	Validity	International Agreements Signed
Patent Patent Act	20 ans	Patent Cooperation Treaty (PCT)
Trademark Trade Marks Act	10 years (renewable)
Design Industrial Designs Act	15 years from the registration date (10 years, renewable for 5 years)
Copyright Copyright and Neighbouring Rights Act	For the length of the author's life plus 50 years after his death	Berne convention For the Protection of Literary and Artistic Works
Industrial Models ARIPO Utility models Act 10 (Protocole de Harare)	10 years

Legal Framework

Independence of Justice: No. The independence of the justice system is often hindered by political considerations.
Equal Treatment of Nationals and Foreigners: Judicial decisions are often influenced by political considerations. Being a citizen of Zimbabwe is therefore an advantage.
The Language of Justice: In principle many local languages (Shona, Ndebele, etc.) are permitted in addition to English. In reality an interpreter will normally be used because the judges only rarely speak other languages than English, Shona or Ndebele.
Recourse to an Interpreter: Anybody accused of a criminal act has a right to a free interpreter if they do not understand the language used in the trial.
Sources of the Law and Legal Similarities: The laws governing commercial entities in Zimbabwe have their origin in the Roman-Dutch law and contain borrowings from English law. Zimbabwe is part of the Southern African Development Community of (SADC) and the Common Market for Eastern and Southern Africa (COMESA).
Checking National Laws Online: The Library of U.S. Congress
Zimbabwe Legal Information Institute

Standards

National Standards Organisations: Standards Association of Zimbabwe, Standards Association of Zimbabwe
Integration in the International Standards Network: Standards Association of Zimbabwe (SAZ) is a member of the International Organization for Standardization (ISO).
Classification of Standards: Zimbabwean Standards (ZWS) include technological symbols, classifications, test methods, characteristics and practice codes.
Online Consultation of Standards: Not available. However, you can ask the SAZ for information.
Certification Organisations: Standards Association of Zimbabwe Standards Association of Zimbabwe

Business Practices

General Information: Communicaid
Culture Crossing
Opening Hours and Days: Offices are generally open between 8 am and 4h30 pm Monday to Friday. Banks are open from 8 am to 3 pm Monday-Tuesday and Thursday-Friday, and 8 am to 1 pm Wednesday and 8 am to 11h30 am Saturday. Supermarkets are generally open 8 am to 5 pm Monday to Friday and 8 am to 1 pm on Saturday.

Public Holidays

New Year's Day	1 January
Independence Day	18 April
Easter Weekend (Good Friday, Easter Saturday, Sunday and Monday)	18-21 April, date varies
May Day	1 May
Africa Day	25 May
Heroes' Day	11 August
Defence Forces Day	12 August
Unity Day	22 December
Christmas	25 December
Boxing Day	26 December

Holiday Compensation: Yes

Periods When Companies Usually Close

Christmas and New Year's Day

1 or 2 weeks

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