ZIMBABWE Law and Practice Contributed by: Nellie Tiyago and Rudo Magundani, Scanlen & Holderness
7. Foreign Investment/National Security 7.1 Applicable Regulator and Process Overview Concerning the foreign investment/national security review regime applicable to FDI in Zimbabwe, please see the preceding sections. 7.2 Criteria for National Security Review Concerning the foreign investment/national security review regime applicable to FDI in Zimbabwe, please see the preceding sections. 7.3 Remedies and Commitments Concerning the foreign investment/national security review regime applicable to FDI in Zimbabwe, please see the preceding sections. 7.4 National Security Review Enforcement Concerning the foreign investment/national security review regime applicable to FDI in Zimbabwe, please see the preceding sections.
Corporate Income Tax A company is liable to pay tax on its taxable income. Taxable income includes income from revenue, prof - its, investments, etc. With effect from 1 January 2024, the corporate income tax rate was set at 25.75%, including the acquired immunodeficiency syndrome (AIDS) levy. Special Tax Rates The Zimbabwe government offers special tax incen - tives to attract local and foreign investment capital in specific economic sectors, designated areas and priority projects, such as agriculture, mining, tourism, SEZs and export processing zones (EPZs). Benefits include reduced corporate tax rates, tax holidays, duty exemptions, capital allowances and investment allowances. To qualify, investors must meet invest - ment thresholds, create employment opportunities, contribute to economic growth and comply with regu - Special tax rates may apply to certain categories of companies. For example, a licensed investor, having an investment licence issued in accordance with the Zimbabwe Investment and Development Agency Act and exporting all of its goods and services, is taxed at a rate of 25%, and this applies for the first five years after the commencement of the operation. Special Mining Lease Holders latory requirements. Licensed Investors The taxable income of the holder of a special mining lease is 15%, while the taxable income of a company derived from mining operations is 25%. Manufacturers For Export The taxable income from the manufacturing of a com - pany that exports 50% or more of its output is 20%. Build-Own-Operate-Transfer and Build-Operate- Transfer Taxpayers engaged in build-own-operate-transfer (BOOT) or BOT activities benefit from reduced tax rates: 0% for the first five years and 15% for the sub - sequent five years. This incentive encourages infra - structure development and investment.
8. Other Review/Approvals 8.1 Other Regimes
Concerning other laws, regulations or regimes that are applicable to a foreign investor in effecting FDI in Zimbabwe, please see the preceding sections.
9. Tax 9.1 Taxation of Business Activities
Zimbabwe employs a source-based tax regime. This means that income from a source within, or deemed to be within, Zimbabwe will be subject to tax in Zimba - bwe unless a specific exemption is available. Resident and non-resident entities may be taxed, and double- taxation agreements (DTAs) may apply. The main taxes applicable to businesses are corporate income tax, value added tax (VAT) and employment (pay-as- you-earn (PAYE)) tax, as detailed in the following.
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