Corporate - Income determination

02/09/2025
  • Taxable Income
    • Taxable income is the base for Corporate Income Tax (CIT), not profits. This includes income from both local and foreign sources, with certain deeming provisions for foreign income.
  • Deductions
    • Most expenses and specified exemptions can be deducted against income. Capital expenditure generally isn't deductible but may qualify for annual allowances.
  • Inventory Valuation
    • Three permitted methods are historic cost, cost of replacement, or net realizable value, with FIFO being commonly used.
  • Dividend Income
    • Dividends from Zimbabwean companies are tax-exempt; foreign dividends are taxed at a flat 20%, with potential relief for foreign tax paid.
  • Interest Income
    • Interest from 'financial institutions' is subject to a 15% withholding tax (WHT) and then exempt from CIT; other interest is taxed at the normal CIT rate.
  • Partnership Income
    • Partnerships themselves aren't taxed, but the income is allocated to partners and taxed at the basic CIT rate.
  • Rent/Royalties Income
    • Generally treated as normal taxable income and taxed at the basic CIT rate, with exemptions for rent from properties outside Zimbabwe.Foreign Income**: Deemed Zimbabwe-sourced income is taxable locally, with relief for foreign taxes paid.