Zimbabwe

Tax on foreign consultants and expatriate employees

Foreigners are subject to the same taxes as Zimbabwean residents.

Consultants will be taxed at business rates (effectively 25.75%). Payments made by local entities to offshore consultants are subject to normal withholding taxes (WHTs) on fees of 15%. This WHT may be allowed as a credit against final tax payable, depending on the tax rules of the foreign country.

Employees will have pay-as-you-earn (PAYE) deducted as per set tax brackets. The onus of deducting the correct PAYE rests entirely with the employer. Zimbabwe uses a Final Deduction System (FDS) for PAYE, which absolves the employees from having to submit annual tax returns except in a few cases (one being expatriate employees who may require a 'tax clearance certificate' in order to externalise assets from Zimbabwe on final emigration).

Effective 1 January 2020, the top tax bracket has had a reduced rate imposed of 40% (previously 45%). Together with a 3% AIDS levy, the overall top rate will be 41.20% (reduced from 46.35%).

Separate tax tables apply to individuals earning Real Time Gross Settlement (RTGS) dollars (also called ZWL) and United States dollars (USD). Persons earning both will have their Zimbabwe earnings converted to US dollars for calculation purposes.

Expatriate employees or consultants become taxable in Zimbabwe from the time that they are contracted to come into Zimbabwe to render services. The terms of any Double Tax Treaties (DTTs) must be taken into account.