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admitted into Zimbabwe that are exempted from import duties;

  • services relating to foreign-going aircraft;

  • handling, pilotage, salvage, towage and operation or management of a foreign-going aircraft, where supplied to a nonresident, nonregistered operator;

  • arrangement of the supply of goods, services or transport of goods for a person who is a nonresident and a nonregistered operator;

  • repair of a train operated by nonresidents, not carrying on business in Zimbabwe;

  • services rendered whilst physically outside Zimbabwe (other than telecommunication services utilised in Zimbabwe);

  • services supplied to a nonresident who is outside Zimbabwe at the time the services are rendered, except where related to land and improvements thereto, or movable property situated inside Zimbabwe;

  • patents and other intellectual property for use outside Zimbabwe;

  • deemed services supplied by a charitable organisation to a public or local authority; or

  • services supplied by a registered operator to his branch situated in an export country.

The above services can only be zero rated if the registered operator obtains and retains the necessary documentary proof acceptable to the Commissioner, or as prescribed in the circumstances.

Input tax

Input tax allowed

Where a registered operator incurred VAT on the acquisition of goods or services for the purposes of making

taxable supplies, the VAT can as a general rule, be deducted as input tax, provided the operator is in possession of the required tax invoice or bill of entry.

Where a registered operator purchased secondhand goods, being fixed property, from a nonregistered operator, and the recipient has paid for the supply and has kept the necessary details of the supplier and the transaction in terms of the prescribed documentary requirements, he may (generally) claim the tax fraction of the amount paid as input tax. This input tax is commonly referred to as ‘notional input’. The input tax is limited to the stamp duty payable.

Where a registered operator (such as a leasing company) repossesses goods from a debtor (who is not a registered operator) under an instalment credit agreement, the registered operator may deduct input tax. This is calculated by multiplying the tax fraction (at the time the supply was originally made) by the balance of the cash value still owing to the supplier.

To qualify as input tax, two requirements have to be met, namely:

  • the goods or services must be acquired by the registered operator wholly or partly for the purpose of consumption, use or supply in the course of making taxable supplies; and

  • the goods supplied must have been subject to VAT at the standard rate or the goods must qualify as ‘secondhand goods’ (previously owned and used), which have been acquired from a nonregistered operator.

Input tax expressly denied

VAT paid by a registered operator for the following purposes may not be deducted as input tax:

  • entertainment;

  • membership fees or subscriptions of clubs, associations or societies of a sports, social or recreational nature;

  • medical costs paid by a medical scheme on medical services provided to its members; and

  • non-commercial motor vehicles, with certain exceptions such as in the case of dealers.

Partial exemption

Where goods or services were acquired only partly for taxable supplies and partly for some other purpose, a fair and reasonable portion may be claimed.


A registered operator is allowed to claim additional input tax credit where previously he would have claimed input tax for a reduced taxable usage and has increased the taxable application of a capital asset worth at least US$60.

Preregistration and post- deregistration VAT

If the company reimburses the person for the costs and purchases, and the goods or services were acquired for the purposes of the trade to be carried on by the company, the company may deduct the VAT as input tax in the tax period during which the reimbursement is made. However, the company may not claim the deduction where:

  • the supply of the goods or services by the person to the company is a taxable supply, or is a supply of secondhand goods not being a taxable supply;

  • the goods or services were acquired more than six months before the date of incorporation; or

PricewaterhouseCoopers 181

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