Recently the Zimbabwe Revenue Authority (ZIMRA) through a public notice commanded taxpayers to pay provisional income tax (Quarterly Payment Dates; QPDs) in foreign currency when taxable income is earned, received or accrued in whole or partly in foreign currency. This is not news but an enforcement of the existing laws because the requirement to pay tax in foreign currency has been part of our fiscal statutes since February 2009 when the country adopted the multi-currency system. It has not be ...
Taxpayers counting foreign exchange gains and losses from monetary policy
Introduction The 2019 Monetary Policy and its accompanying legislation abandoned the 1:1 parity rate of exchange between the bond note and the United States Dollar. Real Time Gross Settlement (RTGS) system balances expressed in the United States dollar immediately before the effective date, 22 February 2019 were taken to be opening balances in RTGS dollars at par with the United States dollar. At the same time, a new currency, the RTGS dollar was introduced. In addition, every amount expresse ...
Tax incentives for small and medium enterprises
Background With the shrinking economy, the big businesses have become overladen with taxes. It is opined that if the SMEs contributed their fair share of taxes there could be a lot of revenue that may well have been collected for the benefit of the fiscus and ultimately for the benefit of the country. Fiscal exclusion has also been a factor influencing the lack of formalization of the SMEs. Depending on the type of registration undertaken by SME’s there are tax obligations that must be fulfi ...
VAT issues of a sale of a going concern
Introduction A disposal of a business or part of a business capable of separate operations by a registered operator as a going concern is deemed to be a supply made in the furtherance or course of the operator’s trade. The seller should account for output tax on the disposal, but with proper planning no VAT is payable, the disposal can be zero rated. The purchaser would not need to finance the VAT between making the VAT payment to the supplier and receiving a VAT refund from ZIMRA. We ...
Government issues guidance for preparation of transfer price policy documentation
Background The government introduced transfer pricing legislation with effect from 1 January 2016. The transfer pricing legislation made a number of provisions regarding transactions between associates. The key requirement of transfer pricing laws and rules is that transactions between associates or related parties should be at arm’s length. The arm’s length principle entails that the amount charged by one related party to another for a given product should be the same as if the parties were ...