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Zimbabwe

period of six years after the completion of the transactions, acts or operations to which they relate.

The registered operator must keep the original documentation. Under certain circumstances, ZIMRA may authorise the retention of microfilm copies or computer tape records in lieu of the originals.

Specific VAT rules

Bad debts

Bad debts written off or factored without recourse qualify for input tax credit equal to the tax fraction applicable at the time output tax was accounted for. If no output tax was paid e.g. where the operator was allowed to account for VAT on a cash basis, then the issue of adjustment does not arise.

Land and buildings

Sale of buildings and land, other than farmland, is standard rated. Farmland, which is used for agricultural and pastoral activities, is not fixed property for VAT purposes.

Leasing

Leasing is generally taxable as part of an instalment credit agreement and the sum payable is standard rated, excluding the finance charges. The letting of fixed property for use by natural persons as dwellings or construction of such dwellings is exempt from VAT.

Promotional gifts

Input tax will be allowed on promotional gifts.

Secondhand goods

There are no special rules regarding secondhand sales except where fixed property subject to stamp duty is concerned. VAT is applicable on sales as normal.

Normal input tax principles apply. Notional input tax applies only to fixed property where stamp duty was payable, and not to the sale of other secondhand goods.

Exports are zero rated as in all other cases.

Tourism industry

Supplies by tour operators are treated as exports and are therefore zero rated when payments are made in foreign currency for facilities such as food, accommodation and other tourist- related services. The payment could be made by foreign bank drafts, credit cards or foreign bank cheques.

Transfer of a business

The sale of a business as a going concern is a zero-rated supply if both parties are registered operators. If not transferred as a going concern, the assets in the business would be taxable as supplies made in the ordinary course of trade. Where one of the parties is a nonregistered operator, VAT would apply as in all other trades.

Other indirect taxes

Import duties

Import duties are levied on imported goods that are classified by commodity code in a customs tariff. Rates vary from duty free to an excess of 40% of the value. A surtax of 15% is applicable to all goods which attract duty at a rate above 40%, except for imported motor vehicles that are five years or older, which attract a surtax of 25% of the value.

Excise duties

Excise duties are levied on a limited number of locally manufactured commodities as listed in an excise tariff, e.g. beer, spirits, wine, cigarettes and tobacco products.

Transfer duty

Transfer duty is calculated at 6% of the market value of fixed property or at 3% of the value of quoted or listed shares. Unquoted shares do not attract any transfer duty.

Stamp duty Stamp duty on cheques is USD0.05.

PricewaterhouseCoopers 185

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