The Zimbabwean tax system is currently based on source and not on residency. Income derived or deemed to be derived from sources within Zimbabwe is subject to tax. It has been indicated that Zimbabwe is considering moving to a residence-based system during the current tax reform exercise.
Source is the place where income originates or is earned, not the place of payment. If goods are sold pursuant to a contract entered into within Zimbabwe, the source of income is deemed to arise in Zimbabwe, regardless of the place of delivery or transfer of title. The source of services is the place in which the services are rendered.
Certain types of income arising outside Zimbabwe may, in the hands of a Zimbabwean tax resident, be deemed to arise in Zimbabwe and be taxed as such. Examples are interest, dividends, and certain copyright royalties arising outside Zimbabwe.
Non-residents who do not have a place of business in Zimbabwe may be subject to WHT.
Personal income tax rates
These tax brackets only apply to employment income.
|Annual taxable income (USD)||Rates of tax (USD)|
|0 to 4,200||0%|
|4,201 to 18,000||0 + 20% for each USD above 4,201|
|18,001 to 60,000||2,760 + 25% for each USD above 18,001|
|60,001 to 120,000||17,660 + 30% for each USD above 60,001|
|120,001 to 180,000||35,760 + 35% for each USD above 120,001|
|180,001 to 240,000||56,760 + 40% for each USD above 180,001|
|240,001 and over||80,760 + 45% for each USD above 240,001|
Other income (i.e. business, rents) is taxed at the corporate rate of tax (currently 25%). That together with the AIDS levy gives an overall effective rate of 25.75%.
A 3% (of tax liability) AIDS levy must be added to the total tax liability calculated. Inclusive of the AIDS levy, the top effective rate for employment income is 46.35% and the top effective rate for other income is 25.75%.