Zimbabwe

Employment income

Employment income includes gross income, no matter where paid, in respect of services rendered, in cash or in kind, for the following in particular (but not limited to):

• Salaries and fees.
• Fringe benefits (i.e. free use of company assets or benefits provided by the employer).
• Allowances and subsidies, subject to deductions for business expenses.
• Deemed value of accommodation provided by employer.
• Deemed value of the use of a company motor vehicle.

The principal exemptions on salaried income are as follows:

• Under certain conditions, the remuneration of employees of foreign governments and United Nations (UN) employees stationed in Zimbabwe is exempt from taxation.
• Relocation expenses paid by the employer are generally not taxed as fringe benefits in the employee's hands except in cases where the payment is considered to be excessive.
• Reimbursement of actual business expenses paid on behalf of the employer is not taxable.
• Employer contributions to approved retirement funds and medical aid schemes (private health insurance) are not taxable in the hands of employees.

Benefits from pension provident and retirement annuity funds

Business income

Business and farming income earned by individuals may be subject to certain provisions of corporate taxation (see the Income determination section in the Corporate tax summary). It is recommended that tax advice is obtained in this regard.

Capital gains

For information on the taxation of capital gains, see Capital gains tax in the Other taxes section.

Investment income

Investment income normally comprises of interest and dividends. Zimbabwe treats the WHT deducted from investment income as a final tax; consequently, there is no need to declare this type of income on tax returns or to pay any additional tax.

Dividend income

'Dividends' means "any amount distributed by a company ... to its shareholders...". The WHT on dividends is at a rate of 15%, except in the case of distributions made from companies that are listed on the Zimbabwe Stock Exchange, where a lower rate of 10% is applicable.

Interest income

Interest arising in the name of Zimbabwe residents from ’financial institutions’ normally has a WHT of 15% deducted by the institution before it is paid to the investor. Non-resident persons are exempt from this WHT. Interest arising from sources other than ’financial institutions’ is subject to tax at the corporate tax rate.

However, the following exemptions apply in the case of natural persons:

• Interest received from certain stock issued by the government.
• Interest received from the Peoples Own Savings Bank.
• Interest not exceeding USD 3,000 or ZWL 390,000 accruing to persons over the age of 55 years.