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Tax Guide
2013
Foreword
foreword
A countrys tax regime is always a key factor for any business considering moving
into new markets. What is the corporate tax rate? Are there any incentives for
overseas businesses? Are there double tax treaties in place? How will foreign source
income be taxed?
Since 1994, the PKF network of independent member firms, administered by PKF
International Limited, has produced the PKF Worldwide Tax Guide (WWTG) to provide
international businesses with the answers to these key tax questions. This handy
reference guide provides clients and professional practitioners with comprehensive
tax and business information for over 90 countries throughout the world.
As you will appreciate, the production of the WWTG is a huge team effort and I
would like to thank all tax experts within PFK member firms who gave up their time
to contribute the vital information on their countrys taxes that forms the heart of this
publication.
I hope that the combination of the WWTG and assistance from your local PKF
member firm will provide you with the advice you need to make the right decisions
for your international business.
Richard Sackin
Chairman, PKF International Tax Committee
Eisner Amper LLP
richard.sackin@eisneramper.com
important disclaimer
Disclaimer
II
Preface
The PKF Worldwide Tax Guide 2013 (WWTG) is an annual publication that provides an
overview of the taxation and business regulation regimes of the worlds most significant
trading countries. In compiling this publication, member firms of the PKF network have
based their summaries on information current on 1 January 2013, while also noting
imminent changes where necessary.
Preface
III
Introduction
IV
Structure
Time Zones
B
Bahamas. . . . . . . . . . . . . . . . . . . 7 am
Bahrain. . . . . . . . . . . . . . . . . . . . 3 pm
Belgium. . . . . . . . . . . . . . . . . . . . 1 pm
Belize. . . . . . . . . . . . . . . . . . . . . 6 am
Bermuda. . . . . . . . . . . . . . . . . . . 8 am
Brazil. . . . . . . . . . . . . . . . . . . . . . 7 am
British Virgin Islands. . . . . . . . . . . 8 am
C
Canada
Toronto. . . . . . . . . . . . . . . . 7 am
Winnipeg. . . . . . . . . . . . . . . 6 am
Calgary. . . . . . . . . . . . . . . . 5 am
Vancouver. . . . . . . . . . . . . . 4 am
Cayman Islands. . . . . . . . . . . . . . 7 am
Chile . . . . . . . . . . . . . . . . . . . . . . 8 am
China - Beijing. . . . . . . . . . . . . . 10 pm
Colombia. . . . . . . . . . . . . . . . . . . 7 am
Cyprus . . . . . . . . . . . . . . . . . . . . 2 pm
Czech Republic. . . . . . . . . . . . . . 1 pm
D
Denmark. . . . . . . . . . . . . . . . . . . 1 pm
Dominican Republic. . . . . . . . . . . 7 am
E
Ecuador. . . . . . . . . . . . . . . . . . . . 7 am
Egypt . . . . . . . . . . . . . . . . . . . . . 2 pm
El Salvador . . . . . . . . . . . . . . . . . 6 am
Estonia. . . . . . . . . . . . . . . . . . . . 2 pm
F
Fiji . . . . . . . . . . . . . . . . . 12 midnight
Finland. . . . . . . . . . . . . . . . . . . . 2 pm
France. . . . . . . . . . . . . . . . . . . . .1 pm
G
Gambia (The). . . . . . . . . . . . . . 12 noon
Germany. . . . . . . . . . . . . . . . . . . 1 pm
Ghana. . . . . . . . . . . . . . . . . . . 12 noon
Greece . . . . . . . . . . . . . . . . . . . . 2 pm
Grenada . . . . . . . . . . . . . . . . . . . 8 am
Guatemala. . . . . . . . . . . . . . . . . . 6 am
VI
Guernsey. . . . . . . . . . . . . . . . . 12 noon
Guyana. . . . . . . . . . . . . . . . . . . . 7 am
H
Hong Kong . . . . . . . . . . . . . . . . . 8 pm
Hungary . . . . . . . . . . . . . . . . . . . 1 pm
I
India . . . . . . . . . . . . . . . . . . . . 5.30 pm
Indonesia. . . . . . . . . . . . . . . . . . .7 pm
Ireland. . . . . . . . . . . . . . . . . . . 12 noon
Isle of Man . . . . . . . . . . . . . . . 12 noon
Israel. . . . . . . . . . . . . . . . . . . . . . 2 pm
Italy . . . . . . . . . . . . . . . . . . . . . . 1 pm
J
Jamaica . . . . . . . . . . . . . . . . . . . 7 am
Japan. . . . . . . . . . . . . . . . . . . . . 9 pm
Jordan . . . . . . . . . . . . . . . . . . . . 2 pm
K
Kenya. . . . . . . . . . . . . . . . . . . . . 3 pm
L
Latvia. . . . . . . . . . . . . . . . . . . . . 2 pm
Lebanon. . . . . . . . . . . . . . . . . . . 2 pm
Luxembourg . . . . . . . . . . . . . . . . 1 pm
M
Malaysia. . . . . . . . . . . . . . . . . . . 8 pm
Malta . . . . . . . . . . . . . . . . . . . . . 1 pm
Mexico . . . . . . . . . . . . . . . . . . . . 6 am
Morocco. . . . . . . . . . . . . . . . . 12 noon
N
Namibia. . . . . . . . . . . . . . . . . . . .2 pm
Netherlands (The). . . . . . . . . . . . . 1 pm
New Zealand. . . . . . . . . . . 12 midnight
Nigeria . . . . . . . . . . . . . . . . . . . . 1 pm
Norway. . . . . . . . . . . . . . . . . . . . 1 pm
O
Oman. . . . . . . . . . . . . . . . . . . . . 4 pm
P
Panama. . . . . . . . . . . . . . . . . . . . 7 am
Papua New Guinea. . . . . . . . . . .10 pm
Peru . . . . . . . . . . . . . . . . . . . . . . 7 am
Philippines. . . . . . . . . . . . . . . . . . 8 pm
Poland. . . . . . . . . . . . . . . . . . . . .1 pm
Portugal . . . . . . . . . . . . . . . . . . . 1 pm
Q
Qatar. . . . . . . . . . . . . . . . . . . . . . 8 am
R
Romania. . . . . . . . . . . . . . . . . . . 2 pm
PKF Worldwide Tax Guide 2013
Russia
Moscow . . . . . . . . . . . . . . . 3 pm
St Petersburg. . . . . . . . . . . . 3 pm
S
Singapore. . . . . . . . . . . . . . . . . . 7 pm
Slovak Republic. . . . . . . . . . . . . . 1 pm
Slovenia . . . . . . . . . . . . . . . . . . . 1 pm
South Africa. . . . . . . . . . . . . . . . . 2 pm
Spain . . . . . . . . . . . . . . . . . . . . . 1 pm
Sweden. . . . . . . . . . . . . . . . . . . . 1 pm
Switzerland. . . . . . . . . . . . . . . . . 1 pm
T
Taiwan . . . . . . . . . . . . . . . . . . . . 8 pm
Thailand . . . . . . . . . . . . . . . . . . . 8 pm
Tunisia . . . . . . . . . . . . . . . . . . 12 noon
Turkey. . . . . . . . . . . . . . . . . . . . . 2 pm
Turks and Caicos Islands . . . . . . . 7 am
Time Zones
U
Uganda. . . . . . . . . . . . . . . . . . . . 3 pm
Ukraine. . . . . . . . . . . . . . . . . . . . 2 pm
United Arab Emirates. . . . . . . . . . 4 pm
United Kingdom. . . . . . . (GMT) 12 noon
United States of America
New York City. . . . . . . . . . . . 7 am
Washington, D.C.. . . . . . . . . 7 am
Chicago. . . . . . . . . . . . . . . . 6 am
Houston. . . . . . . . . . . . . . . . 6 am
Denver . . . . . . . . . . . . . . . . 5 am
Los Angeles. . . . . . . . . . . . . 4 am
San Francisco. . . . . . . . . . . 4 am
Uruguay . . . . . . . . . . . . . . . . . . . 9 am
V
Venezuela. . . . . . . . . . . . . . . . . . 8 am
Z
Zimbabwe. . . . . . . . . . . . . . . . . . 2 pm
VII
Zimbabwe
ZIMBABWE
Currency: United States Dollar Dial Code To: 263
(USD)
Member Firm:
City:
Name:
Harare
Sydney Bvurere
Contact Information:
0777 373 214
sydney.bvurere@pkf.co.za
Harare
Josephine Matambo 0773 732 355
josephine.matambo@pkf.co.za
A. TAXES PAYABLE
Federal taxes and levies
COMPANY TAX
A company is resident in Zimbabwe (Zim) if it is incorporated, formed or established in Zim
or has its place of effective management (day to day management) in Zim.
Zimbabwean resident companies and private business corporations (companies) are taxed
on non-exempt income from a source within or deemed to be within Zim. Income from a
foreign source attracts tax only if it falls within the specific provisions relating to deemed
source. However, a residence based income tax system is being proposed to come into
effect on 1 January 2014.
Normal tax is payable by Zimbabwean companies on their taxable income at the rate
of 25%. A 3% AIDs levy is imposed on the tax chargeable giving an effective tax rate
of 25.75%.The tax is payable by both public and private companies as well as private
business corporations.
The tax year usually runs from 1 January to 31 December, although different balance
dates are available in certain circumstances. Tax is payable in four quarterly instalments
(QPDs) on the 25th of March, 25th of June, 25th of September and 20th of December
by which dates 10%, 25%, 30% and 35% of the tax liability for the year must be paid
respectively.
Small to medium size enterprises (SMEs) without organised records and with annual
turnover below USD60, 000 may pay presumptive taxes instead of normal tax.
Presumptive taxes are periodic taxes, absolute figures or percentage-based, which are
levied on certain specified business operations, usually undertaken by SMEs.
Mining companies are, in addition to their specific corporate rates of tax, subject to a
royalty calculated on the gross sales relating to the transfer of mineral resources. The
royalty is calculated using different percentages applicable to each the type of mineral. The
percentages range from 1% on base metals to 15% on precious stones.
Trusts
Zimbabwean trusts pay tax at the same rate as companies (25% on each dollar of
taxable income plus a 3% AIDs levy on the tax chargeable). This rate is apparently,
the same as the one applicable to an individuals trade and investment income. There
are no personal credits to a trust created in terms of the will of a deceased taxpayer.
In cases where the income of a trust that is ordinarily resident in Zim includes foreign
interest or dividends, such income is taxable (dividends at 20% flat rate). Relief is
granted for foreign tax suffered.
Partnerships
Partnerships are not separate legal entities. This means they have no existence
separate from the individual partners that comprise them. Taxable income for the
partnership is computed jointly and then shared between the partners according to
the agreed ratios and each partner is then subject to tax on his share of profits as
trade income.
CAPITAL GAINS TAX (CGT)
CGT is levied on taxable gains from a source within Zim from the sale or deemed
saleof immovable property and any marketable security (specified asset) according
to the Capital Gains Tax Act. Non-residents are only subject to CGT on any direct or
indirect interest or right in or to immovable property situated in Zim.
Zimbabwe
For transfers between USD5,000 and USD 20,000- for every $100 or
part thereof
OTHER TAXES:
These include, amongst others, customs and excise duties, carbon tax, and skills and
standards development levies.
B. DETERMINATION OF TAXABLE INCOME:
The taxable income of a company is determined by deducting expenditure incurred
for the purposes of trade or in the production of income and other allowable
expenses and allowances from the companys income. Capital receipts are subject
to CGT. Expenditure is allowed to the extent that it is of a revenue nature.
Zimbabwe
Special
Wear & Tear Investment
Notes
Initial
Allowance
Allowance (%)
Allowance (W & T) (%)
(SIA) (%)
Industrial
Buildings
25
Farm
improvements
25
Commercial
buildings
25
2,5
Railway lines
25
Staff housing
25
Motor vehicles
25
20 up to 33.33
15
1,4
1,6
15
2,4
1
15
1,3,4
1,5,7
Notes
1) The SIA is granted in the year of purchase in relation to movables and in the
year of construction in respect of immovable or year in which the asset is first
used. In subsequent years accelerated W&T is allowed on original cost.
2) SIA is granted on commercial buildings situated at growth point areas only.
3) As from 1 January 2009, the amount qualifying for the allowances in respect of
each unit of staff housing was set at USD10,000 (only available to units the cost
of which does not exceed USD25,000).
4) The Investment allowance is granted in growth point areas only. Applies on
constructed buildings or alterations to existing buildings and on new or unused
articles, implements, machinery and utensils. Motor vehicles for use on roads
are excluded. Allowances are not subject to recoupment.
5) Allowances on motor vehicles restricted to a cost of USD10,000 for vehicles
purchased on or after 1 January 2009.
6) Includes permanent schools, nursing homes, hospitals and clinics (with effect
from 1 January 2009 any part of the cost in excess of USD10 000 of such
permanent schools, nursing homes, hospitals and clinics will be disregarded).
7) W&T on all movables is generally on a reducing balance basis while that on
immovable is on straight line basis (on cost).
8) Includes hotels with liquor and casino licenses.
Stock inventory
All trading stock on hand at the end of the tax year must be added to income while
all trading stock on hand at the beginning of the year ranks as a deduction. Trading
stock is valued at the lesser of cost or net realisable value. Consumable stores and
work-in-progress on hand constitute trading stock. The LIFO method of valuing
trading stock is not permitted..
Research and development expenditure (R&D)
Qualifying expenditure incurred by the taxpayer during the year of assessment
in carrying out experiments and research relating to his trade, other than capital
expenditure on plant, machinery, land or premises or on the acquisition by the
taxpayer of rights, whether for the purpose of his trade or otherwise is allowed in full.
However, contributions to such expenditure by another taxpayer areallowed to that
other taxpayer with some restrictions.
Export-market development expenditure
Exporters can claim as a deduction the amount of any export-market development
expenditure incurred during the year of assessment, together with an amount equal
to 100% of such expenditure. The term export market development expenditure
means expenditure that is not of a capital nature and is proved to the satisfaction
of the Commissioner to have been incurred wholly or exclusively for the purpose of
seeking opportunities for the export of goods from Zim or of creating or increasing
the demand for such exports.
It includes expenditure for any one or more of the following purposes:
1. research into, or the obtaining of information relating to, markets outside Zim
2. research into the packaging or presentation of goods for sale outside Zim
PKF Worldwide Tax Guide 2013
Zimbabwe
3. advertising goods outside Zim or otherwise securing publicity outside Zim for
goods
4. soliciting business outside Zimor participating in trade fairs
5. investigating or preparing information, designs, estimates or other material for
the purpose of submitting tenders for the sale or supply of goods outside Zim
6. bringing prospective buyers to Zim from outside the country; and
7. providing samples of goods to persons outside Zim.
Intellectual property
The deduction of expenditure, in any single year, incurred for the right of use of an
invention, patent, copyright, knowledge or other property of a similar nature or design
or other property of a similar nature is not permitted to exceed an amount determined
by dividing the total premium by the number of years representing the duration of the
agreement. If the agreement is for a duration of more than ten years, or the duration
is indefinite, then the duration is deemed to be ten years.
Interest and finance charges
Interest incurred in the production of income is a deductible expense. Interest
incurred prior to the commencement of tradeis deductible in the year in which trade
commences. However, interest incurred during building operations on a loan used for
building purposes is capitalised and ranks for capital allowances as part of the cost of
the building. Pre-incorporation expenditure is not deductible.
Tax losses
Subject to certain anti-avoidance provisions, tax losses are carried forward to the
following year provided such losses may not be carried forward for a period of
more than six years, except for losses from mining operations. Losses from trading
operations cannot be offset with employment income.
Interest received
Interest received (or accrued) is included in gross income to the extent that such
interest has not been subjected to withholding tax at source (mainly bank interest).
Foreign sourced income
Zimbabwean resident individuals and corporates are subject to tax in Zim on foreign
interest and dividends. Foreign dividends are subject to tax at a flat rate of 20%.
However, this general principle may be overridden by the provisions of a double
taxation agreement or certain unilateral relief provisions contained in the Zim tax
legislation.
Incentives
The following table indicates applicable normal tax rates of 25% and indicates the
existing tax holiday schemes in the form of reduced tax rates.
Income Tax Rates
Years ending 31 December 2013
and 2012
Notes
2013
2012
25%
25%
25%
25%
0%
0%
0%
0%
Licensed investor
0%
0%
15%
15%
15%
15%
Pension Funds
3
0%
0%
20%
20%
Notes:
1. Subject to 3% Aids levy giving effective rates of 25.75%; 15.45% and 20.60%.
2. The 0% rate applies for the first five years and then a 15% applies in the next
five years and 25% thereafter.
3. The 0% rate applies for the first five years and 25% applies thereafter.
Zimbabwe
Zimbabwe
Employers with acceptable accounting records are allowed to use the Final Deduction
System for their payroll tax. This system requires that the employers deduct the
payroll tax accurately such that the individual employees do not have to submit
income tax returns for their employment income to the tax authorities at the end of
the year unless they have other income.
The income tax rates applicable to natural persons for the tax year ending 31
December 2013 are:
Annual taxable
income
USD
Rate
Cumulative Tax
Chargeable
USD
Up to 3,000
0%
20%
1,800
25%
4,800
30%
15,600
35%
26,100
40%
38,000
Above 120,000
45%
38,100 + 45%
Note
Husbands and wives are taxed separately. Taxable income from employment is
arrived at after deducting pension and social security contributions and trade union
subscriptions.An AIDS levy of 3% on tax chargeableis imposed after deduction of
credits. The maximum effective rate is therefore 46.35%. The above rates apply
only to remuneration from employment and pensions. Credits for medical expenses
and medical aid contributions, physically disabled persons and elderly persons are
granted with stipulated maxima.
Any taxable income for an individual which is received by or accrues to him from any
trade, investment or other activity (excluding employment or pension) is taxed at a flat
rate of 25%. The 3% AIDS levy is also applicable to the tax on this income, giving an
effective rate of 25.75%.
I. TREATY AND NON-TREATY WITHHOLDING TAX RATES
The Income Tax Act subjects a number of payments to withholding tax at source.
These are as follows:
Double Taxation Agreements
Notes
Non-Resident Tax
on Dividends (NRST)
Companies listed on
the Zimbabwe Stock
Exchange
10
10
10
15
2,5
Other companies
15
10
10
15
2,5
Non-Residents Tax on
Fees (NRTF) Includes
directors fees accruing
to non-residents
15 10
7,5
10
10
Non-Residents Tax on
Remittances (NRTR)
This applies to branch
operations only and
applies to expenses
allocable to the
Zimbabwe operation
15 20
20
20
20
Non-Residents Tax
on Interest (NRTI)
(Repealed with effect
from 30 September
2009)
Zimbabwe
Notes
15 10
Resident Tax on
Dividends (RST)
(Companies resident
in Zimbabwe receiving
dividends are exempt)
Companies listed on
the Zimbabwe Stock
Exchange
10
7,5
10
10
Other companies
15
Residents Tax on
Interest (RTI) Banks
and Building Societies
15
- 3,4,7
15
- 3,4,7
Automated Financial
transactions tax
USD
0.05
Intermediary money
transfer tax
USD
0.05
Private securities
Immovable property
15
10
Commission on
property or insurance
20
Non- executive
directors fees
20
10
Other
Note
1) Other existing Double Taxation Agreements include Norway, South Africa,
Bulgaria, Mauritius, Canada, Poland, France and Malaysia.
2) Payable by all non-resident persons, including companies. For the lower rate
to apply, the non-resident shareholder must hold a minimum of 25% of the
Zimbabwe Companys shares.
3) This tax is final.
4) Taxpayers who are over the age of 55 years are exempt on the first USD250 per
month.
5) Due date is within 10 days after the date of payment or accrual, whichever is
earlier.
6) Due date is within 10 days of the remittance of the allocable expenditure.
7) Due date is within 10 days of the end of the month following the month of
payment.
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