The agreement applies to withholding taxes from 1 February 2017 and to other taxes from 1 January 2017. The 1965 Income Tax Convention between the two countries will cease to apply in respect of taxes for any period to which the new Convention applies. Zimbabwe announced on 14 April that it had ratified the double taxation agreement concluded with South Africa (SA) on 4 August 2015 through Statutory Act 40 of 2016, published in the Official Journal of 8 April. Taxand South Africa is investigating this update. Due to the rules of source, only a few items subject to foreign tax are subject to Zimbabwean tax. However, there is a general unilateral provision on exemption from double taxation. Zimbabwe ratifies the double taxation agreement with South Africa You can access the texts of the relevant agreements via the navigation area above. If a company is deemed to reside in both Contracting States, the competent authorities shall determine by mutual agreement the registered office of the company for the purposes of the contract on the basis of the place of effective management, the place where it was incorporated or otherwise incorporated and all other relevant factors. If no agreement is concluded, the company is not entitled to an exemption or exemption provided for in the contract, unless agreed by the competent authority.
The treaty will enter into force once ratified by South Africa and will replace the obsolete treaty between South Africa and Southern Rhodesia in 1965. The treaty contains the provision that a permanent establishment is considered to be constituted if an enterprise of a Contracting State provides services through employees or other employees for the same or a related project for one or more periods totalling more than 183 days in a period of 12 months. In Zimbabwe, it will apply to income tax, non-resident shareholder tax, capital gains tax and non-resident fees, royalties and interest tax. In South Africa, the new agreement is intended to apply to normal taxes, dividend tax, withholding tax on interest and royalties, and tax on foreign artists and athletes. The agreement includes normal South African tax, dividend tax, withholding tax on royalties, tax on foreign artists and athletes and withholding tax on interest. It includes Zimbabwean income tax, non-resident shareholder tax, non-resident royalty tax, non-resident royalty tax, capital gains tax and resident interest tax. The provisions of the new Treaty apply to withholding taxes deducted from amounts paid or credited from the first day of the second month following the entry into force of the Treaty and to other taxes for taxation years beginning on or after the first day of January. . Double taxation treaties (DTAs) and protocols already in place have been divided into two groups for ease of navigation, i.e. for content similar to our Global Guide, subscribe to our mailing list and stay up to date. Tax relief in the form of a Zimbabwean tax credit is allowed for taxes paid on foreign income.
The total eligible credit must not exceed an amount equal to the total tax payable in Zimbabwe as foreign taxable income in Zimbabwe in relation to the total taxable income. .