Value Added Tax Act

Chapter 23:12

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Citation

Chapter 23:12

Date

Language

English

Type

Act

Value Added Tax Act

Chapter 23:12

Commenced on 1 January 2004
[This is the version of this document as it was from 20 February 2019 to 30 December 2019.]
[Note: This version of the Act was revised and consolidated by the Law Development Commission of Zimbabwe]

[Amended by Finance Act, 2018 (Act 1 of 2018) on 14 March 2018]
[Amended by Finance Act, 2019 (Act 1 of 2019) on 20 February 2019]

[Acts 12/2002, 10/2003 (ss. 29-39), 18/2003 (ss. 10-11), 29/2004 (ss. 22-28), 2/2005 (ss. 21-27), 6/2006 (ss. 14-16), 12/2006, 16/2007 (s 19), 3/2009 ( ss. 27-29), 5/2009 (ss 11),10/2009 (ss 23-28), 3/2010 (ss 10-12), 5/2010 (ss. 10-12), 8/2011 (s. 15), 9/2011 (ss. 7-8), 4/2012 (ss. 4-5), 6/2012 (s. 6), 1/2014 (ss. 13-18), 5/2014 (s. 33), 8/2014 (ss. 9-10), 11/2014 (ss. 19-20), 8/2015 (ss. 9-15), 9/2015 (ss. 8, 15), 3/2016 (Part C), 2/2017 (ss.23-27)]AN ACT to provide for taxation in respect of the supply of goods and services and the importation and exportation of goods; to provide for the repeal of the Sales Tax Act [Chapter 23:08]; and to provide for matters connected therewith.

Part I – Preliminary

1. Short title and date of commencement

This Act may be cited as the Value Added Tax Act [Chapter 23:12].

2. Interpretation

(1)In this Act—“ancillary transport services” means cargo inspection services, preparation of customs documentation and storage of transported goods or goods to be transported;“association not for gain” means—

(a)any religious institution of a public character; or

(b)any other society, association, organisation or educational institution of a public character, whether incorporated or not, which—

(i)is carried on otherwise than for the purposes of profit or gain to any proprietor, member or shareholder; and

(ii)is, in terms of its memorandum, articles of association, written rules or other document constituting or governing the activities of that society, association or organisation—

(A)required to utilise any property or income solely in the furtherance of its aims and objects; and;

(B)prohibited from transferring any portion thereof directly or indirectly in any manner whatsoever so as to profit any person other than by way of the payment in good faith of reasonable remuneration to any officer or employee of the society, association or organisation for any services rendered to such society, association or organisation; and

(C)upon the winding-up or liquidation of such society, association or organisation, obliged to give or transfer its assets remaining after the satisfaction of its liabilities to some other society, association or organisation with objects similar to those of the said society, association or organisation;

“Authority” means the Zimbabwe Revenue Authority established by section 3 of the Revenue Act;“business day” means any day which is not a Saturday, Sunday or public holiday;“capital goods” means any asset, or any component of any asset, which is of a character subject to a deduction of expenditures incurred as provided in terms of paragraphs (c) and (f) of subsection (2) of section 15 of the Taxes Act;“cash value”, in relation to the supply of goods supplied under an instalment credit agreement, means—

(a)where the seller or lessor is a banker or financier, an amount equal to or exceeding the sum of the cost to the banker or financier of the goods, including any cost of erection, construction, assembly or installation of the goods borne by the banker or financier and the tax leviable in terms of paragraph (a) of subsection (1) of section six in respect of such supply by the banker or financier; or

(b)where the seller or lessor is a dealer, an amount equal to or exceeding the price, including tax, at which the goods are normally sold by him for cash or may normally be acquired from him for cash, including tax and any charge, including tax, made by the seller or lessor in respect of the erection, construction, assembly or installation of the goods if such charge is financed by the seller or lessor under the instalment credit agreement;

“Charging Act” means the Finance Act [Chapter 23:04] or any other enactment by which credits and rates of tax are fixed;“clearing agent” means a person licensed or required to be licensed in terms of section 216A of the Customs and Excise Act [Chapter 23:02];[definition of “clearing agent” inserted by Act 8 of 2015]“commercial rental establishment” means—

(a)accommodation in any hotel, motel, inn, boarding house, hostel or similar establishment in which lodging is regularly or normally provided to five or more persons at a daily, weekly, monthly or other periodic charge; or

(b)accommodation in any house, flat, apartment or room, other than accommodation in respect of which paragraph (a) or (c) apply which is regularly or systematically let or held for letting as residential accommodation for continuous periods not exceeding forty-five days in the case of each occupant of such house, flat, apartment or room, if the total annual receipts and accruals from the letting of all thereof have exceeded the prescribed amount or there are reasonable grounds for believing that such total annual receipts and accruals will exceed that amount; or

(c)accommodation in any house, flat, apartment, room, caravan, houseboat, caravan or camping site which constitutes an asset, including a leased asset, of a business undertaking or a separately identifiable part of a business undertaking carried on by any person who—

(i)lets or holds for letting as residential accommodation five or more houses, flats, apartments, rooms, caravans, houseboats, camping or caravan sites in the course of such business undertaking;

(ii)derives total annual receipts and accruals from the letting of all such houses, flats, apartments, rooms, caravans, houseboats, camping and caravan sites which exceed the prescribed amount or there are reasonable grounds for believing that such total annual receipts and accruals will exceed that amount; and

(iii)regularly or normally lets or holds for letting as residential accommodation such houses, flats, apartments, rooms, caravans, houseboats, caravans or camping sites for continuous periods not exceeding forty-five days in the case of each occupant; or

(d)[paragraph repealed by section 29 of Act 10 of 2003]

but does not include—

(a)accommodation in any boarding establishment or hostel operated by any employer solely or mainly for the benefit of the employees of such employer or of a connected person in relation to such employer or of their dependants, provided such establishment or hostel is not operated for the purpose of making profits from such establishment or hostel for the employer or such connected person;

(b)accommodation in any boarding establishment or hostel operated by any local authority otherwise than for the purpose of making profits from such establishment or hostel;

“Commissioner”, subject to section five, means the Commissioner-General of the Authority;“connected persons” means—

(a)any natural person, including the estate of a natural person if such person is deceased or insolvent, and—

(i)any near relative of that natural person, being a near relative as defined in section 2 of the Taxes Act or the estate of any such relative if the relative is deceased or insolvent; or

(ii)any trust fund in respect of which any such near relative or such estate of such near relative is or may be a beneficiary; or

(b)any trust fund and any person who is or may be a beneficiary in respect of that fund; or

(c)any partnership or business registered in terms of the Corporations Act; and—

(i)any member thereof; or

(ii)any other person where that person and a member of such partnership or business registered in terms of the Corporations Act, as the case may be, are connected persons in terms of this definition; or

(d)any company other than a business registered in terms of the Corporations Act, and—

(i)any person, other than a company, where that person, his spouse or minor child or any trust fund in respect of which that person, his spouse or minor child is or may be a beneficiary, is separately interested or two or more of them are in the aggregate interested in five per centum or more of the company’s paid-up capital or five per centum or more of the company’s equity share capital or five per centum or more of the voting rights of the shareholders of the company, whether directly or indirectly; or

(ii)any other company the shareholders in which are mainly the same persons as the shareholders in the first-mentioned company, or which is controlled by the same persons who control the first-mentioned company; or

(iii)any person where that person and the person referred to in subparagraph (i) or his spouse or minor child or the trust fund referred to in that subparagraph or the other company referred to in subparagraph (ii) are connected persons in terms of this definition; or

(e)any separate trade, branch or division of a registered operator which is separately registered as a registered operator under section fifty-one and any other such trade, branch or division of the registered operator; or

(f)any branch, division or separate trade of an association not for gain which is deemed by subsection (5) of section twenty-three to be a separate person for the purposes of that section and any other branch, division or separate trade of that association, whether or not such other branch, division or separate trade is a registered operator; or

(g)any person and any superannuation scheme referred to in the definition of “financial services” the members of which are mainly the employees or office holders or former employees or office holders of that person;

“consideration”, in relation to the supply of goods or services to any person, includes any payment made or to be made, including any deposit on any returnable container and tax, whether in money or otherwise, or any act or forbearance, whether or not voluntary, in respect of, in response to, or for the inducement of, the supply of any goods or services, whether by that person or by any other person, but does not include any payment made by any person as an unconditional gift to any association not for gain:Provided that a deposit, other than a deposit on a returnable container, whether refundable or not, given in respect of a supply of goods or services shall not be considered as payment made for the supply unless and until the supplier applies the deposit as consideration for the supply or such deposit is forfeited;“consideration in money” includes consideration expressed as an amount of money;“Corporations Act” means the Private Business Corporations Act [Chapter 24:11];“Customs Act” means the Customs and Excise Act [Chapter 23:02];“domestic goods and services” means the provision to a natural person of the right to occupy for residential purposes the whole or part of the accommodation provided in any commercial rental establishment, including, where it is provided as part of the right of occupation, the provision of—

(a)cleaning and maintenance;

(b)electricity, gas, air conditioning or heating;

(c)a telephone, television set, radio, satellite dish, decoder or other similar article;

“donated goods or services” means goods or services which are donated to an association not for gain and are intended for use in the carrying on or carrying out of the purposes of that association;“dwelling” means any building, premises, structure or any other place, or any part thereof, used predominantly as a place of residence or abode of any natural person or which is intended for use as a place of residence or abode of any natural person, together with any appurtenances or structure belonging thereto and enjoyed therewith, but does not include a commercial rental establishment;“employee organisation” means an organisation in which a number of employees in any particular undertaking, industry, trade, occupation or profession are associated together for the purpose of regulating relations between themselves or some of them and their employers or some of their employers or mainly for that purpose, disregarding the provision of sickness, accident or unemployment benefits for the members of the organisation or for the widows, children, dependants or nominees of deceased members;“entertainment” means the provision of any food, beverages, accommodation, entertainment, amusement, recreation or hospitality of any kind by a registered operator whether directly or indirectly to anyone in connection with a trade carried on by him;“exempt supply” means a supply that is exempt from tax under section eleven;“export country” means any country other than Zimbabwe and includes any part of Zimbabwe declared in terms of subsection (1) of section 20 of the Export Processing Zones Act [Chapter 14:07], to be an export processing zone;“exported”, in relation to any movable goods supplied by any registered operator under a sale or an instalment credit agreement, means—

(a)consigned or delivered by the registered operator to the recipient at an address in an export country as evidenced by documentary proof acceptable to the Commissioner; or

(b)delivered by the registered operator to the owner or charterer of any foreign-going aircraft when such aircraft is going to a destination in an export country and such goods are for use or consumption in such aircraft; or

(c)removed from Zimbabwe by the recipient, who is a resident of Zimbabwe, for conveyance to an export country in accordance with an export incentive scheme approved by the Minister;

(d)removed from Zimbabwe by the recipient, who is not a resident of Zimbabwe, for conveyance to an export country, subject to such conditions as may be set by the Commissioner by notice in a statutory instrument;

“farm land” means land used for agricultural and pastoral activities but does not include—

(a)land referred to as Communal Land in terms of section 3 of the Communal Land Act [Chapter 20:04];

(b)land which is a municipal area, town area or local government area as defined in the Urban Councils Act [Chapter 29:15];

(c)a town ward of a rural district council or an area that has been declared a specified area in terms of the Rural District Councils Act [Chapter 29:13]; or

(d)land in the area of any township as defined in the Land Survey Act [Chapter 20:12]; or

(e)State land the layout of which has been approved in terms of section 43 of the Regional, Town and Country Planning Act [Chapter 29:12];

“financial lease” means a written agreement for the letting and hiring of capital goods to be used by the purchaser for the purposes of his trade, where the seller is—

(a)a banking institution registered or required to be registered in terms of the Banking Act [Chapter 24:20]; or

(b)a building society registered or required to be registered in terms of the Building Societies Act [Chapter 24:02];

[definition of “financial lease” inserted by section 29 of Act 10 of 2003]“financial services” means—

(1a)any service provided by a banking institution registered or required to be registered in terms of the Banking Act [Chapter 24:20] (No. 9 of 1999); or[paragraph (1a) inserted by section 22 of Act 1 of 2018]

(a)any service provided by or on behalf of a banking or other institution that is a participant in a payment system registered in terms of the National Payment Systems Act [Chapter 24:23] (No. 21 of 2001); or[paragraph substituted by Act 2 of 2017]

(b)any service provided by a building society registered or required to be registered in terms of the Building Societies Act [Chapter 24:02]; or

(c)the exchange of banknotes or other currency of any country, except where they are to be used as collectors’ items; or

(d)the provision of any deposit, loan or credit, including the provision of any guarantee, indemnity, security or bond in respect of the performance of obligations related to a deposit, loan or credit; or

(e)the issue or transfer of ownership of any share in a company or interest in a private business corporation; or

(f)services rendered by an insurer registered in terms of the Insurance Act [Chapter 24:07]; or

(g)the services of an actuary, insurance agent, insurance broker as defined in the Insurance Act [Chapter 24:07] or fund administrator as defined in the Pension and Provident Funds Act [Chapter 24:09], to the extent that those services are rendered to or on behalf of an insurer registered in terms of the Insurance Act [Chapter 24:07] or to or on behalf of a pension fund registered in terms of the Pension and Provident Funds Act [Chapter 24:09].[paragraph substituted by section 39 of Act 12 of 2006]

“fiscalised electronic register” means an electronic sales register having such features as may be prescribed;“fiscalised electronic register”[definition of “fiscalised electronic register” inserted by Act 8 of 2014]“fiscal memory device”[definition of “fiscal memory device” repealed by Act 8 of 2014]“fiscalised recording regulations”[definition of “fiscalised recording regulations” repealed by Act 8 of 2014]“fixed date” means the date fixed in terms of subsection (2) of section one as the date of commencement of this Act;“fixed property” means land other than farm land, together with improvements affixed thereto, and includes any share or unit in a company which confers a right to or an interest in the use of immovable property, and, in relation to a property time-sharing scheme, any time-sharing interest, and any real right in any such land, unit, share or time-sharing interest;“foreign-going aircraft” means any aircraft engaged in the transportation for reward of passengers or goods wholly or mainly on flights between airports in Zimbabwe and airports in export countries or between airports in export countries;“goods” means corporeal movable things, fixed property and any real right in any such thing or fixed property, but excluding—

(a)money;

(b)any right under a mortgage bond or pledge of any such thing or fixed property; and

(c)any stamp, form or card which has a money value and has been sold or issued by the State for the payment of any tax or duty levied under any Act of Parliament, except when subsequent to its original sale or issue it is disposed of or imported as a collector’s piece or investment article;

“imported services” means a supply of services that is made by a supplier who is not resident in Zimbabwe or carries on business outside Zimbabwe to a recipient who is a resident of Zimbabwe to the extent that such services are utilised or consumed in Zimbabwe;[definition of “imported services” substituted by section 14 of Act 1 of 2019 with effect from 1 January 2019]“input tax”, in relation to a registered operator, means—

(a)tax charged under section six and payable in terms of that section by—

(i)a supplier on the supply of goods or services made by that supplier to the registered operator; or

(ii)the registered operator on the importation of goods by him; or

(b)an amount equal to the tax fraction, being the tax fraction applicable at the time the supply is deemed to have taken place, of the lesser of any consideration in money given by the registered operator for or the open market value of the supply, not being a taxable supply, to him by way of a sale on or after the 1st January, 2004, by a resident of Zimbabwe of fixed property in respect of the acquisition of which stamp duty is, in terms of the Stamp Act, payable or would have been payable had an exemption from stamp duty, whether in terms of the Stamp Act or any other Act of Parliament, not been applicable:Provided that such amount shall not exceed the amount of stamp duty, which is or would have been payable in respect of such acquisition; and

(c)an amount equal to the tax fraction of the consideration in money deemed by subsection (14) of section nine to be for the supply, not being a taxable supply, by a debtor to the registered operator of goods repossessed under an instalment credit agreement:Provided that the tax fraction applicable under this paragraph shall be the tax fraction applicable at the time of supply of the goods to the debtor under such agreement as contemplated in paragraph (c) of subsection (3) of section eight, where the goods or services concerned are acquired by the registered operator wholly for the purpose of consumption, use or supply in the course of making taxable supplies or, where the goods or services are acquired by the registered operator partly for such purpose, to the extent, as determined in accordance with section sixteen, that the goods or services concerned are acquired by the registered operator for such purpose;

“instalment credit agreement” means any agreement entered into on or after the 1st January, 2004, whereby any goods consisting of corporeal movable goods or of any machinery or plant, whether movable or immovable—

(a)are supplied under a sale under which—

(i)the goods are sold by the seller to the purchaser against payment by the purchaser to the seller of a stated or determinable sum of money at a stated or determinable future date or in whole or in part in instalments over a period in the future; and

(ii)such sum of money includes finance charges stipulated in the agreement of sale; and

(iii)the aggregate of the amounts payable by the purchaser to the seller under such agreement exceeds the cash value of the supply; and

(iv)the—

(A)purchaser does not become the owner of those goods merely by virtue of the delivery to or the use, possession or enjoyment by him thereof; or

(B)seller is entitled to the return of those goods if the purchaser fails to comply with any term of that agreement; or

(b)are supplied under a lease under which—

(i)the rent consists of a stated or determinable sum of money payable at a stated or determinable future date or periodically in whole or in part in instalments over a period in the future; and

(ii)such sum of money includes finance charges stipulated in the lease; and

(iii)the aggregate of the amounts payable under such lease by the lessee to the lessor for the period of such lease, disregarding the right of any party thereto to terminate the lease before the end of such period, and any residual value of the leased goods on termination of the lease, as stipulated in the lease, exceeds the cash value of the supply; and

(iv)the lessee accepts the full risk of destruction or loss of, or other disadvantage to, those goods and assumes all obligations of whatever nature arising in connection with the insurance, maintenance and repair of those goods while the agreement remains in force;

“insurance” means insurance or guarantee against loss, damage, injury or risk of any kind whatever, whether pursuant to any contract or law, and includes reinsurance; and “contract of insurance” includes a policy of insurance, an insurance cover, and a renewal of a contract of insurance:Provided that nothing in this definition shall apply to any insurance specified in the definition of “financial services”;“invoice” means a document notifying an obligation to make payment;“local authority” means—

(a)any rural district council, municipal council or town council;

(b)any other body, council, board, committee or institution established or deemed to be established by or under any law which has functions similar to those of the councils referred to in paragraph (a) and which may levy rates on the value of immovable property within its area of jurisdiction or receive payments for services rendered or to be rendered as approved by the Minister responsible for local government; and

(c)any catchment or subcatchment council constituted in terms of the Water Act [Chapter 20:24] or any other institution which has powers similar to those of a local authority;

“Minister” means the Minister of Finance and Economic Development or any other Minister to whom the President may, from time to time, assign the administration of this Act;“money” means—

(a)coins of current mass or bank notes which the Reserve Bank of Zimbabwe has issued in Zimbabwe in accordance with Part VI of the Reserve Bank of Zimbabwe Act [Chapter 22:15] and which have not been demonetized;

(b)any—

(i)coin, other than a coin made wholly or mainly from a precious metal, or bank note which is the currency of any country, other than Zimbabwe, and which is used or circulated or is intended for use or circulation as currency;

(ii)bill of exchange, promissory note, bank draft, postal order or money order;

except when disposed of or imported as a collector’s piece, investment article or item of numismatic interest;

“motor dealer” means a registered operator who makes a taxable supply of any motor vehicle in the ordinary course of trade which continuously or regularly supplies motor vehicles, whether such supply is made by way of or solely under an instalment credit agreement or by way of a rental agreement at an economic rental consideration;[definition of “motor dealer” inserted by section 29 of Act 10 of 2003]“motor vehicle”[definition of “motor vehicle” repealed by section 31 of Act 28of 2005]“non-governmental organisation”[definition of “non-governmental organisation” repealed by section 21 of Act 2 of 2005]“open market value” in relation to the supply of goods or services, means the open market value thereof determined in accordance with section three;“output tax”, in relation to any registered operator, means the tax charged under paragraph (a) of subsection (1) of section six, in respect of the supply of goods and services by the registered operator;“person” includes any public authority, local authority, company or body of persons, whether corporate or unincorporated, the estate of any deceased or insolvent person and any trust fund;“postal licensee” means any person, other than the successor postal company, licensed in terms of the Postal and Telecommunications Act [Chapter 12:05] to provide the postal services;“precious metal” means gold, silver, platinum, iridium and other metal of the platinum group, and any other metal which the Minister, after consultation with the Minister responsible for mines, may by notice in the Gazette declare to be a precious metal for the purpose of this Act;“prescribed amount” means any amount prescribed by the Charging Act or in regulations made in terms of section seventy-eight;“prescribed rate” in relation to any interest payable in terms of this Act, means the prescribed rate of interest fixed in terms of section seventy-eight or, where such rate has not been so prescribed, at the rate fixed in terms of the Prescribed Rate of Interest Act [Chapter 8:10];“private voluntary organisation” means an organisation registered in terms of the Private Voluntary Organisations Act [Chapter 17:05] and approved by the Commissioner-General by notice in a statutory instrument.[definition of “private voluntary organisation” reinserted by section 21 of Act 2 of 2005]“public authority” means any department or division of the public service, and includes the Zimbabwean Defence Force, the Zimbabwean Republic Police and the Prisons and Correctional Service Commission;[definition of “public authority” amended by Act 3 of 2016]“recipient”, in relation to any supply of goods or services, means the person to whom the supply is made;“registered operator” means any person who is or is required to be registered under this Act:Provided that where the Commissioner has under section twenty-three or fifty-three determined the date from which a person is a registered operator that person shall be deemed to be a registered operator from that date;“registration number”, with respect to any registered operator, means the number allocated to him by the Commissioner for the purposes of this Act;“rental agreement” means any agreement entered into before, on or after the 1st January, 2004, for the letting of goods, other than a lease referred to in paragraph (b) of the definition of “instalment credit agreement” in this section or a “financial lease” as defined in the repealed Act;“repealed Act” means the Sales Tax Act [Chapter 23:08];“Reserve Bank” means the Reserve Bank of Zimbabwe established by the Reserve Bank of Zimbabwe Act [Chapter 22:15];“resident of Zimbabwe” means a person, other than a company, who is ordinarily resident in Zimbabwe or a company which is incorporated in Zimbabwe:Provided that any other person or any other company shall be deemed to be a resident of Zimbabwe to the extent that such person or company carries on in Zimbabwe any trade or other activity and has a fixed or permanent place in Zimbabwe relating to such trade or other activity;“residential rental establishment” means any commercial rental establishment contemplated in paragraph (a) or (c) of the definition of “commercial rental establishment” in which not less than seventy per centum of the persons to whom domestic goods and services are supplied reside, or are expected to reside, for a period of forty-five days or longer;“returnable container” means any container belonging to a class of containers in relation to which, at the time of delivery of the contents thereof, ownership of that container is not transferred to the recipient of the contents and a specifically identified amount is usually charged as a deposit by the supplier of the contents upon the express undertaking of the supplier that upon the return of that container such deposit will be refunded or allowed as a credit to such recipient or any other person returning such container;“Revenue Act” means the Revenue Authority Act [Chapter 23:11];“sale” means an agreement of purchase and sale and includes any transaction or act whereby or in consequence of which ownership of goods passes or is to pass from one person to another;“second-hand goods” means goods which were previously owned and used but does not include—

(a)animals; and

(b)gold coins as contemplated in paragraph (i) of subsection (1) of section ten;

“services” means anything done or to be done, including the granting, assignment, cession or surrender of any right or the making available of any facility or advantage, but excludes the supply of goods, money or any stamp, as contemplated in paragraph (c) of the definition of “goods”;“short-term insurance” means any insurance other than life insurance, whether provided pursuant to any contract or law, including any policy of insurance, an insurance cover, and a renewal of a contract of insurance, and includes reinsurance;[definition of “short-term insurance” inserted by Act 8 of 2015]“Stamp Act” means the Stamp Duties Act [Chapter 23:09];“successor postal company” means the company licensed in terms of section 113 of the Postal and Telecommunications Act [Chapter 12:05] to provide the postal services previously carried on by the Posts and Telecommunications Corporation established by the repealed Posts and Telecommunications Corporation Act [Chapter 12:02];“supplier”, in relation to any supply of goods or services, means the person supplying the goods or services;“supply” includes all forms of supply, irrespective of where the supply is effected, and any derivative of“supply” shall be construed accordingly;“tax” means any tax imposed by this Act;“tax fraction” means the fraction calculated in accordance with the formula—r /100+rin which formula “r” represents the rate of tax applicable under subsection (1) of section six;“tax invoice” or “fiscal tax invoice” or other word or phrase denoting an invoice of tax for the making of taxable supplies, means a document provided by a registered operator, or printed by a fiscalised electronic register or fiscal memory device used by a registered operator, for the purpose of section 20;[definition of “tax invoice” or “fiscal tax invoice” substituted by Act 4 of 2012]“tax period”, in relation to a registered operator, means a tax period determined in terms of section twenty-seven;“taxable supply” means any supply of goods or services which is chargeable with tax under paragraph (a) of subsection (1) of section six, including tax chargeable at the rate of zero per centum under section ten;“Taxes Act” means the Income Tax Act [Chapter 23:06];“trade” means—

(a)in the case of any registered operator, other than a local authority, any trade or activity which is carried on continuously or regularly by any person in Zimbabwe or partly in Zimbabwe and in the course or furtherance of which goods or services are supplied to any other person for a consideration, whether or not for profit, including any trade or activity carried on in the form of a commercial, financial, industrial, mining, farming, fishing or professional concern or any other concern of a continuing nature or in the form of an association or club;

(b)without limiting the applicability of paragraph (a) in respect of any activity carried on in the form of a commercial, financial, industrial, mining, farming, fishing or professional concern—

(i)the making of supplies by any public authority of goods or services which the Minister, having regard to the circumstances of the case, is satisfied are of the same kind or are similar to taxable supplies of goods or services which are or might be made by any person other than such public authority in the course or furtherance of any trade, if the Commissioner, in pursuance of a decision of the Minister under this subparagraph, has notified such public authority that its supplies of such goods or services are to be treated as supplies made in the course or furtherance of a trade;

(ii)the activities of any private voluntary referred to in the definition of "private voluntary organisation” in section 2(1) of the Private Voluntary Organisations Act [Chapter 17:05];[subparagraph substituted by section 21 of Act 2 of 2005]

(c)in the case of a registered operator which is a local authority—

(i)the supply of water;

(ii)the supply of services consisting of the drainage, removal or disposal of sewage or garbage;

(iii)the supply of goods or services incidental to or necessary for the supply of goods or services in respect of which sub-paragraph (i) or (ii) apply;

(iv)the making of supplies of goods or services in the course of any business carried on by such local authority, if—A. such supplies are of the same kind or are similar to taxable supplies of goods or services which are or might be made by any person other than such local authority in the course or furtherance of any trade; andB. the revenue normally derived by such local authority for its own benefit from making such supplies, together with any grant or subsidy paid to that local authority by the State or any person for the purposes of such business, is, or may reasonably be expected to be, sufficient to fund the expenditure, excluding expenditure of a capital nature but including a reasonable provision for depreciation in the value of the assets of the business by reason of wear and tear and obsolescence, incurred by that local authority in the production of such revenue:Provided that—I. anything done in connection with the commencement or termination of any such trade or activity shall be deemed to be done in the course or furtherance of that trade or activity;II. the supply outside Zimbabwe of goods or services by any concern from any branch or main business thereof where such branch or main business is permanently located at premises outside Zimbabwe, if—

(a)the branch or main business can be separately identified; and

(b)an independent system of accounting is maintained by the concern in respect of the branch or main business,shall be deemed not to be effected in the course or furtherance of any trade or activity carried on by such concern;

III. the rendering of services by an employee to his employer in the course of his employment or the rendering of services by the holder of any office in performing the duties of his office, shall not be deemed to be the carrying on of a trade to the extent that any amount constituting remuneration as contemplated in the definition of “remuneration” in paragraph 1 of the Thirteenth Schedule to the Taxes Act is paid or is payable to such employee or office holder, as the case may be, and shall not apply in relation to any employment or office accepted by any person in carrying on any trade carried on by him independently of the employer or concern by whom the amount of remuneration is paid or payable;IV. any activity carried on by a natural person essentially as a private or recreational pursuit or hobby or any activity carried on by a person other than a natural person which would, if it were carried on by a natural person, be carried on essentially as a private or recreational pursuit or hobby shall not be deemed to be the carrying on of a trade;V. any activity, shall to the extent to which it involves the making of exempt supplies, be deemed not to be the carrying on of a trade;

“trust fund” means any fund consisting of cash or other assets, the administration and control of which is entrusted to any person acting in a fiduciary capacity by any person, whether under a deed of trust or by agreement, or by a deceased person under a will made by that person;“unconditional gift” means a payment voluntarily made to any association not for gain for the carrying on or the carrying out of the purposes of that association and in respect of which no identifiable direct valuable benefit arises or may arise in the form of a supply of goods or services to the person making that payment or in the form of a supply of goods or services to any other person who is a connected person in relation to the person making the payment, but does not include any payment made by a public authority or a local authority.

(2)For the purposes of subsection (1)—

(a)“cheque” means a cheque as defined in section 72 of the Bills of Exchange Act [Chapter 14:02], a postal order, a money order, a traveller’s cheque, or any order or authorisation, whether in writing, by electronic means, or otherwise, to a financial institution to credit or debit any account;

(b)“currency” means any banknote or other currency of any country, other than when used as a collector’s piece, investment article, item of numismatic interest, or otherwise than as a medium of exchange;

(c)“debt security” means any interest in or right to be paid money that is, or is to be, owing by any person, but does not include a cheque;

(d)“equity security” means any interest in or right to a share in the capital of a juristic person or the interest of a member in a private business corporation incorporated in terms of the Corporations Act;

(e)“life insurance policy” means any policy of insurance issued in the ordinary course of carrying on life insurance business as defined in section 3 of the Insurance Act [Chapter 24:07];

(f)“participatory security” includes a unit in a unit trust scheme but does not include an equity security, a debt security, money or a cheque;

(g)“superannuation scheme” means a scheme whereby provision is made for the payment or granting of benefits by a benefit fund or pension fund, as defined in section 2 of the Taxes Act;

(3)Notwithstanding subsection (2), the terms “debt security”, “equity security” and “participatory security” shall not include any of the following—

(a)a life insurance policy or any other policy of insurance;

(b)any ownership or interest in land, other than an interest as mortgagee;

(c)an interest in a superannuation scheme.

(4)Notwithstanding anything in this section, the term “financial services” does not include—

(a)the cession, assignment, transfer or other supply of any right to receive payment in relation to any taxable supply where, as a result of any such cession, assignment, transfer or supply, output tax in relation to that taxable supply would not be or become attributable to any tax period for the purposes of subsection (3) of section fifteen; or

(b)the transfer of any interest in or a right to be paid money that is, or is to be, owing by any person under a rental agreement.

3. Determination of “open market value”

(1)For the purposes of this section—

(a)“similar supply”, in relation to a supply of goods or services, means any other supply of goods or services that, in respect of the characteristics, quality, quantity, functional components, materials and reputation of the first mentioned goods or services, is the same as, or closely or substantially resembles, that supply of goods or services;

(b)the open market value of a supply shall include any tax charged under paragraph (a) of subsection (1) section six on that supply.

(2)For the purposes of this Act, the open market value of any supply of goods or services at any date shall be the consideration in money which the supply of those goods or services would generally fetch if supplied in similar circumstances at that date in Zimbabwe, being a supply freely offered and made between persons who are not connected persons.

(3)For the purposes of this Act the open market value of any consideration, not being consideration in money, for a supply of goods or services shall be ascertained in the same manner, with any necessary modifications, as the open market value of any supply of goods or services is ascertained under this section.

(4)Where the open market value of any supply of goods or services cannot be determined under subsection (2), the open market value shall be the consideration in money which a similar supply would generally fetch if supplied in similar circumstances at that date in Zimbabwe, being a supply freely offered and made between persons who are not connected persons.

(5)Where the open market value of any supply of goods or services cannot be determined in terms of subsections (2) or (4), the open market value shall be determined in accordance with a method approved by the Commissioner which provides a sufficiently objective approximation of the consideration in money which could be obtained for that supply of those goods or services.

Part II – Administration

4. Act to be administered by Commissioner

The Commissioner shall be responsible for carrying out the provisions of this Act.

5. Delegation of functions by Commissioner

(1)Subject to the Revenue Act, the Commissioner may delegate to any officer employed in the Authority any function that is conferred or imposed upon him by this Act, other than this power of delegation.

(2)An officer to whom a function has been delegated in terms of subsection (1) shall exercise it subject to the Commissioner’s directions.

(3)A delegation in terms of subsection (1)—

(a)may be revoked or modified by the Commissioner at any time; and

(b)shall not preclude the exercise by the Commissioner of the function so delegated.

(4)Anything done by an officer in the exercise of a function delegated to him by the Commissioner in terms of subsection (1)—

(a)may be set aside or revised, subject to this Act, by that officer or by the Commissioner; and

(b)shall be deemed, until set aside, to have been done by the Commissioner

(5)This section shall be construed as being additional to, and not as derogating from, the Commissioner’s powers of delegation under any other law.

Part III – Value added tax

6. Value added tax

(1)Subject to this Act, there shall be charged, levied and collected, for the benefit of the Consolidated Revenue Fund a tax at such rate as may be fixed by the Charging Act on the value of—

(a)the supply by any registered operator of goods or services supplied by him on or after the 1st January, 2004, in the course or furtherance of any trade carried on by him:Provided that this paragraph shall not apply to the supply of second-hand motor vehicles that are subject to special excise duty on sales or disposals of second-hand motor vehicles referred to in section 172B of the Customs and Excise Act [Chapter 23:02];[proviso inserted by Act 6 of 2006]and

(b)the importation of any goods into Zimbabwe by any person on or after the 1st January, 2004; and

(c)the supply of any imported services by any person on or after the 1st January, 2004; and

(d)goods and services sold through an auctioneer (as defined in section 56(6)) by persons who are not registered operators.Provided that this paragraph shall not apply to the supply of second hand motor vehicles that are subject to special excise duty on sales or disposals of second-hand motor vehicles referred to in section 172B of the Customs and Excise Act [Chapter 23:02].[paragraph repealed by Act 8 of 2005 and reinserted by Act 16 of 2007 and proviso inserted by Act 10 of 2009]

(2)Except as otherwise provided in this Act, the tax payable in terms of—

(a)paragraph (a) of subsection (1) shall be paid by the registered operator referred to in that paragraph; and

(b)paragraph (b) of subsection (1) shall be paid by the person referred to in that paragraph; and

(c)paragraph (c) of subsection (1) shall be paid by the recipient of the imported services; and

(d)paragraph (d) of subsection (1) shall be paid by the auctioneer.[paragraph repealed by Act 8 of 2005 and reinserted by Act 16 of 2007]

(3)Where any goods manufactured in Zimbabwe, being of a class or kind subject to excise duty under Part II of the Second Schedule of the Customs Act, have been supplied at a price which does not include such excise duty and tax has become payable in respect of such supply in terms of paragraph (a) of subsection (1), a tax shall be levied and paid on a value which is the sum of the value for excise purposes plus the excise duty, or such other value as may be determined by the Minister by notice in a statutory instrument.

(4)The tax payable in terms of subsection (3), shall be paid by the person liable in terms of the Customs Act for the payment of the said excise duty.

(5)Subject to this Act, any provision of the Customs Act relating to the clearance of goods which are subject to the payment of excise duty and payment thereof shall, mutatis mutandis, be effected as if enacted in terms of this Act.

7. Certain supplies of goods or services deemed to be made or not made

(1)For the purposes of this Act, where—

(a)goods acquired, manufactured, assembled, constructed or produced by a person are sold, under a power exercisable by another person, in or towards satisfaction of a debt owed by the person whose goods are sold; and

(b)the person whose goods are sold has not furnished, to the person exercising the power of sale, a statement in writing that the supply of those goods would not be a taxable supply if those goods were sold by the person whose goods are sold, and stating fully the reasons why that supply would not be a taxable supply;

those goods shall be deemed to be supplied in the course of a trade.

(2)For the purposes of this Act, where a person ceases to be a registered operator, any goods (other than any goods in respect of the acquisition of which by the registered operator a deduction of input tax under subsection (3) of section fifteen was denied in terms of subsection (2) of section sixteen or would have been denied if those sections had been applicable prior to the 1st January, 2004,) or right capable of assignment, cession or surrender which in either case then forms part of the assets of his trade, shall be deemed to be supplied by him in the course of his trade immediately before he ceased to be a registered operator, unless the trade is carried on by another person who in terms of section fifty-five is deemed to be a registered operator:Provided that—

(a)where such right is so deemed to be supplied that supply shall be deemed to be a supply of a service;

(b)this subsection shall not apply to any such goods or right in respect of the acquisition of which by such registered operator a deduction in terms of subsection (3) of section fifteen has not been allowed or will not be allowed, where such registered operator was registered pursuant to an application for registration under section twenty-three due to a bona fide error on the part of any person.

(3)For the purposes of this Act, any door to door sale, whereby credit is granted at a place other than the creditor’s normal place of business and the agreement of sale is subject to a “cooling off” period within which the purchaser may cancel the agreement without prejudice to himself, shall be deemed not to be a supply of goods or services unless the credit receiver has failed to exercise the right to terminate the agreement within the period available to him under the agreement.

(4)For the purposes of this Act—

(a)any lay-by agreement, whereby goods are sold for a consideration not exceeding thirty thousand dollars or the prescribed amount and are reserved by deposit for delivery when the purchase price or a determined portion thereof is paid, shall not be deemed to be a supply of goods or services unless and until the goods are delivered to the purchaser;

(b)where such agreement is cancelled or terminates for any other reason and the seller retains any amount paid by the purchaser or recovers any amount owing by the purchaser under such agreement, the seller shall be deemed to have supplied a service in respect of such agreement.

(5)For the purposes of this Act, a registered operator shall be deemed to supply services to any public authority or local authority to the extent of any payment made by the authority concerned to or on behalf of the registered operator in respect of the taxable supply of goods or services by the registered operator to any person.

(6)For the purposes of this Act, the disposal of a trade as a going concern, or a part thereof which is capable of separate operation, shall be deemed to be a supply of goods made in the course or furtherance of such trade.

(7)For the purposes of this Act, except subsection (3) of section fifteen, where a registered operator receives any indemnity payment under a contract of insurance or is indemnified under a contract of insurance by the payment of an amount of money to another person, that payment or indemnification, as the case may be, shall, to the extent that it relates to a loss incurred in the course of carrying on a trade, be deemed to be consideration received for a supply of services performed on the day of receipt of that payment or on the date of payment to such other person, as the case may be, by that registered operator in the course or furtherance of his trade:Provided that—

(a)this subsection shall not apply in respect of any indemnity payment received or indemnification under a contract of insurance where the supply of services contemplated by that contract is not a supply subject to tax under paragraph (a) of subsection (1) of section six;

(b)this subsection shall not apply in respect of any indemnity payment received by a registered operator under a contract of insurance to the extent that such payment relates to the total reinstatement of goods, stolen or damaged beyond economic repair, in respect of the acquisition of which by the registered operator a deduction of input tax under subsection (3) of section fifteen was denied in terms of subsection (2) of section sixteen or would have been denied if these sections had been applicable prior to the 1st January, 2004,.

(8)For the purposes of this Act, where any registered operator in carrying on a trade in Zimbabwe transfers goods or provides any service to or for the purposes of his branch or main business in respect of which paragraph II of the proviso to the definition of “trade” in section two are applicable, the registered operator shall be deemed to supply such goods or service in the course or furtherance of his trade.

(9)For the purposes of this Act, where any goods are repossessed under an instalment credit agreement, a supply of such goods shall be deemed to be made by the debtor under such instalment credit agreement to the person exercising his right of possession, and where such debtor is a registered operator the supply shall be deemed to be made in the course or furtherance of his trade unless such goods did not form part of the assets held or used by him for the purposes of his trade.

(10)For the purposes of this Act, a supply of the use or right to use or the grant of permission to use any goods, whether with or without a driver, pilot, crew or operator, under any rental agreement, instalment credit agreement, charter party, agreement for charter or any other agreement under which such use or permission to use is granted, shall be deemed to be a supply of goods.

(11)For the purposes of this Act, where any person bets an amount on the outcome of a race or on any other event or occurrence, the person with whom the bet is placed shall be deemed to supply a service to such first-mentioned person.

(12)For the purposes of this Act, except subsection (3) of section fifteen, where any registered operator who makes taxable supplies of services contemplated in subsection (11), receives any amount paid by any other registered operator as a prize or winnings in consequence of a supply of such services made by the last-mentioned registered operator to the first-mentioned registered operator, the first-mentioned registered operator shall be deemed to supply a service to the last-mentioned registered operator.

(13)For the purposes of this Act, where a single supply of goods or services would, if separate considerations had been payable, have been charged with tax in part at the rate applicable under paragraph (a) of subsection (1) of section six and in part at the rate applicable under section ten, each part of the supply concerned shall be deemed to be a separate supply.

(14)The supply by a registered operator of—

(a)any goods (other than fixed property acquired prior to the 1st January, 2004, by a registered operator who is a natural person if such property was used by him mainly as his private residence and no deduction of any amount has been made by him under subsection (3) of section fifteen in respect of such property) or services, where such goods or services were acquired or imported by him partly for the purpose of consumption, use or supply in the course of making taxable supplies, including supplies which would have been taxable supplies if section six of this Act had been applicable prior to the 1st January, 2004,, and were held or utilised by him partly for the said purpose immediately prior to the supply by him of such goods or services, shall be deemed to be made wholly in the course or furtherance of his trade;

(b)fixed property acquired prior to the 1st January, 2004, by such registered operator, being a natural person, shall be deemed to be made otherwise than in the course or furtherance of his trade:Provided that—

(a)such property was used by him prior to such supply mainly as his private residence; and

(b)no deduction of any amount has been made by him under subsection (3) of section fifteen in respect of such property.

(15)For the purposes of this Act, where, together with the supply of a share coupled with an exclusive right of occupation as defined in section 27 of the Deeds Registries Act [Chapter 20:05] referred to in the interpretation of “fixed property” in subsection (1) of section two, any amount of the total loan obligation of the company or association administering the property concerned is allocated or any amount of the loan obligation thus allocated is delegated, or any interest in or right to be paid money that is, or is to be, owing by the company or association under its loan obligation is transferred to any person who is or will be a shareholder of such company or association, such allocation, delegation or transfer, as the case may be, shall be deemed to form part of the supply of such share.

(16)For the purposes of the definition of “input tax” in subsection (1) of section two and subsections (4) and (5) of section seventeen, as applicable to any company or association referred to in subsection (15), any taxable supply of a share referred to in subsection (15) made on or after a date fixed by the Minister by notice in the Gazette by a developer who registers a notarial deed referred to in section 27 of the Deeds Registries Act [Chapter 20:05], shall be deemed to have been made by the company or association created by or under such deed, to the extent that—

(a)the supply of such share to such developer was not a taxable supply by such company or association to such developer; or

(b)such developer was not or will not in terms of subsection (3) of section fifteen be entitled to make a deduction of “input tax” in section two in respect of the supply of such share to him.

(17)For the purposes of this Act, where an importation of goods is deemed to have been made by an agent in the circumstances contemplated in subsection (4) of section fifty-six, such agent shall be deemed to make a supply of goods to the recipient of the supply by the principal.

8. Time of supply

(1)For the purposes of this Act, a supply of goods or services shall, except as is otherwise provided for in this Act, be deemed to take place—

(a)at the time an invoice is issued by the supplier or the recipient in respect of that supply; or

(b)at the time any payment of consideration is received by the supplier in respect of that supply; or

(c)in the case of a supply of a moveable good, at the time of its removal from the place of sale; or

(d)in the case of a supply of an immoveable goods, at the time the recipient takes possession of it; or

(e)in the case of a supply of a service at the time the service is performed;

whichever time is earlier.[subsection (1) substituted by section 15 of Act 1 of 2019 with effect from 1 January 2019]

(2)A supply of goods or services shall be deemed to take place—

(a)where the supplier and the recipient are connected persons—

(i)in the case of a supply of goods which are to be removed, at the time of the removal; and

(ii)in the case of a supply of goods which are not to be removed, at the time when they are made available to the recipient; and

(iii)in the case of a supply of services, at the time the services are performed:

Provided that this paragraph shall not apply in any case where an invoice is issued in respect of that supply or any payment is made in respect of that supply on or before—

(a)the day on which the return is furnished for the tax period during which that supply would, but for this proviso, have been made; or

(b)the last day prescribed by this Act for furnishing the return for the tax period during which that supply would, but for this proviso, have been made;

(b)where that supply is a supply to which subsection (3) of section seven refers, on the day after the last day of the period during which the recipient may exercise the right to terminate the agreement;

(c)where that supply is a supply to which subsection (4) of section seven refers, at the time at which the goods are delivered to the recipient:Provided that in any case in which a supply of services is deemed to take place under paragraph (b) of subsection (4) of section seven, that supply of services shall be deemed to take place at the time that the agreement of sale is cancelled or terminates;

(d)where the supply is for a consideration in money received by the supplier by means of any machine, meter or other device operated by a coin or token—

(i)in the case of such supplier, at the time any such coin or token is taken from that machine, meter or other device by or on behalf of the supplier; and

(ii)in the case of the recipient of such supply, at the time the coin or token is inserted into that machine, meter or other device by or on behalf of the recipient;

(e)where subsection (8) of section seven applies in respect of a transfer of goods or the provision of any service by a registered operator to his branch at the time the goods are delivered to such branch or the service is performed, as the case may be.

(3)Notwithstanding anything in subsection (1) or (2)—

(a)where goods are supplied under any rental agreement or where services are supplied under any agreement or law which provides for periodic payments, they shall be deemed to be successively supplied for successive parts of the period of the agreement or as determined by such law, and each of the successive supplies shall be deemed to take place when a payment becomes due or is received, whichever is the earlier;

(b)where and to the extent that—

(i)goods are supplied progressively or periodically under any agreement or law which provides for the consideration for that supply to be paid in instalments or periodically and in relation to the progressive or periodic supply of those goods; or

(ii)goods or services supplied directly in the construction, repair, improvement, erection, manufacture, assembly or alteration of goods are supplied under any agreement or law which provides for the consideration for that supply to become due and payable in instalments or periodically in relation to the progressive nature of the work;

those goods or services shall be deemed to be successively supplied, and each such successive supply shall be deemed to take place whenever any payment in respect of any supply becomes due, is received, or any invoice relating only to that payment is issued, whichever is the earliest;

(c)where goods are supplied under an instalment credit agreement, that supply shall, subject to paragraph (b) of subsection (2), be deemed to take place at the time the goods are delivered or the time any payment of consideration is received by the supplier in respect of that supply, whichever time is earlier;

(d)where goods consisting of fixed property or any real right therein are supplied under a sale, that supply shall be deemed to take place—

(i)where registration of transfer of the goods is effected in a deeds registry, on the date of such registration; or

(ii)on the date on which any payment is made in respect of the consideration for such supply;

hichever date is earlier;

(e)where goods consisting of fixed property or any real right therein are supplied under a sale, that supply shall be deemed to take place, where no transfer has occurred and no payment is made in consideration, on the date of the agreement;

(f)where any supply of a service is deemed to be made as contemplated in subsection (11) of section seven, the service shall be deemed to be supplied to the extent that payment of any amount of the bet is made, and each such supply shall be deemed to take place whenever any payment in respect of such supply is received by the supplier;

(g)where any supply of a service is deemed to be made as contemplated in subsection (12) of section seven, the supply shall be deemed to take place whenever any amount is paid out as a prize or winnings by the supplier of the services contemplated in subsection (11) of section seven.

(4)Subject to paragraph (a) of subsection (2) and subsection (6), where goods are supplied under an agreement, other than an instalment credit agreement or rental agreement, and the goods or part of them are appropriated under that agreement by the recipient in circumstances where the whole of the consideration is not determined at the time they are appropriated, that supply shall be deemed to take place when and to the extent that any payment in terms of the agreement is due or is received or an invoice relating to the supply is issued by the supplier or the recipient, whichever is the earliest.

(5)Where any goods or any right capable of assignment, cession or surrender is deemed to be supplied by a registered operator in the course of his trade as contemplated in subsection (2) of section seven the time of supply shall be deemed to be the time contemplated in that section.

(6)Where any supply of goods or services is deemed to be made as contemplated in subsection (1) of section seventeen the time of supply shall be deemed to be the time that the goods or services are applied as contemplated in the said subsection.

(7)The supply of goods or services which is deemed to be made by any registered operator as contemplated in subsection (3) of section seventeen shall be deemed to take place at the end of the month in respect of which the cash equivalent of the benefit or advantage concerned, as determined under paragraph (f) of subsection (1) of section 8 of the Taxes Act, or a portion of such cash equivalent, is in terms of the Thirteenth Schedule to that Act required to be included in the remuneration of the employee or office holder to whom the benefit or advantage is granted or, where such cash equivalent is not required to be included in the remuneration of the employee or office holder in terms of the said Thirteenth Schedule, on the last day of the year of assessment in terms of the said Act, as applicable to that employee or office holder, during which the benefit or advantage was granted to him.

(8)Where a supply of repossessed goods is deemed by subsection (9) of section seven to be made by a debtor under an instalment credit agreement, the time of that supply shall be deemed to be the day on which the goods are repossessed or, where the debtor may under any law be reinstated in his rights and obligations under such agreement, the day after the last day of any period during which the debtor may under such law be so reinstated.

(9)Where any supply of goods is deemed to be made as contemplated in subsection (17) of section seven, that supply shall be deemed to take place at the time the tax payable on importation of the goods is paid by the agent.

9. Value of supply of goods or services

(1)For the purposes of this Act this section shall apply for determining the value of any supply of goods or services.

(2)The value to be placed on any supply of goods or services shall, save as is otherwise provided in this section, be the value of the consideration for such supply, as determined in accordance with subsection (3), less so much of such value as represents tax:Provided that—

(a)there shall be excluded from such consideration the value of any postage stamp as defined in section 2 of the Postal and Telecommunications Act [Chapter 12:05], when used in the payment of consideration for any service supplied by the successor postal company or any postal licensee;

(b)where the portion of the value of the said consideration which represents tax is not accounted for separately by the registered operator, the said portion shall be deemed to be an amount equal to the tax fraction of that consideration.

(3)For the purposes of this Act the value of any consideration referred to in this section shall be—

(a)to the extent that such consideration is a consideration in money, the amount of the money; and

(b)to the extent that such consideration is not a consideration in money, the open market value of that consideration.

(4)Where—

(a)a supply is made by a person for no consideration or for a consideration in money which is less than the open market value of the supply; and

(b)the supplier and recipient are connected persons in relation to each other; and

(c)if a consideration for the supply equal to the open market value of the supply had been paid by the recipient, he would not have been entitled under subsection (3) of section fifteen to make a deduction of the full amount of tax in respect of that supply,

the consideration in money for the supply shall be deemed to be the open market value of the supply:Provided that this subsection shall not apply to the supply of a benefit or advantage of employment contemplated in subsection (3) of section seventeen.

(5)Where goods or services are deemed to be supplied by a registered operator in terms of subsection (2) or (8) of section seven, the supply shall be deemed to be made for a consideration in money equal to the lesser of—

(a)the cost to the registered operator of the acquisition, manufacture, assembly, construction or production of such goods or services, including—

(i)any tax charged in respect of the supply to the registered operator of such goods or services or of any components, materials or services utilised by him in such manufacture, assembly, construction or production;

(ii)where such goods or any right referred to in subsection (2) of section seven, when held by the registered operator, constituted trading stock as defined in section 2 of the Taxes Act, any further costs, including tax, incurred by him in respect of such goods or right;

(iii)any costs, including tax, incurred by the registered operator in respect of the transportation or delivery of such goods or the provision of such services in connection with the transfer of such goods or the provision of such services as contemplated in subsection (8) of section seven; and

(iv)where such goods or services were acquired under a supply in respect of which the consideration in money was in terms of subsection (4) of this section deemed to be the open market value of the supply or would in terms of that provision have been deemed to be the open market value of the supply were it not for the fact that the recipient would have been entitled under subsection (3) of section fifteen to make a deduction of the full amount of tax in respect of that supply, such open market value to the extent that it exceeds the consideration in money for that supply; or

(b)the open market value of such supply.

(6)For the purposes of this Act, where goods are supplied under an instalment credit agreement, the consideration in money for the supply shall be deemed to be the cash value of that supply.

(7)Where goods or services are deemed by subsection (1) of section seventeen to be supplied by a registered operator, the supply shall, subject to subsection (8), be deemed to be made for a consideration in money equal to the open market value of such supply.

(8)Where goods or services are deemed by subsection (2) of section seventeen to be supplied by a registered operator, the supply shall be deemed to be made for a consideration in money determined in accordance with the formula—A × (B — C)in which formula—“A” represents the lesser of—

(a)the cost, including any tax forming part of such cost, to the registered operator of the acquisition, manufacture, assembly, construction or production of those goods or services:Provided that—

(i)where the goods or services were acquired under a supply in respect of which the consideration in money was in terms of subsection (4) deemed to be the open market value of the supply or would in terms of that section have been deemed to be the open market value of the supply were it not for the fact that the recipient would have been entitled under subsection (3) of section fifteen to make a deduction of the full amount of tax in respect of that supply, the cost of those goods or services shall be deemed to include such open market value to the extent that it exceeds the consideration in money for that supply; or

(ii)where the registered operator was at some time after the acquisition of such goods or services deemed by subsection (4) of section seventeen to have been supplied with such goods or services, the amount which was represented by “B” in the formula contemplated in subsection (4) of section seventeen when such goods or services were deemed to be supplied to the registered operator; or

(iii)where the registered operator was at some time after the acquisition of the goods or services required to make an adjustment contemplated in subsections (2) or (5) of section seventeen, the amounts then represented by “A” in the said formula or by “B” in the formula contemplated in subsection (5) of section seventeen respectively, in the most recent adjustment made under subsections (2) or (5) of section seventeen by the registered operator prior to such deemed supply of goods or services;

and

(b)the open market value of the supply of those goods or services at the time any reduction in the extent of the consumption or use of the goods is deemed by subsection (6) of section seventeen to take place;

“B” represents the percentage that the use or application of the goods or services for the purposes of making taxable supplies was of the total use or application of such goods or services determined under subsection (1) of section sixteen, subsections (4) or (5) of section seventeen or this subsection, whichever was applicable in the period immediately preceding the twelve month period contemplated in “C”; and“C” represents the percentage that, during the twelve month period during which the decrease in use or application of the goods or services is deemed to take place, the use or application of the goods or services for the purposes of making taxable supplies, in respect of which, if such goods or services had been acquired at the time of such use or application, a deduction of input tax would not have been denied in terms of paragraph (a) of subsection (2) of section sixteen, was of the total use or application of the goods:Provided that where the percentage contemplated in “B” does not exceed the said percentage by more than ten per centum of the total use or application, the said percentage shall be deemed to be the percentage determined in “B”.

(9)Where a service is under paragraph (b) of subsection (4) of section seven deemed to be supplied, the consideration in money for the supply shall be deemed to be an amount equal to the amount retained or recovered as contemplated in that section.

(10)Where any supply of goods is a supply which would, but for the proviso to subsection (1) of section ten, be charged with tax at the rate of zero per centum, the consideration in money for that supply shall be deemed to be an amount equal to the purchase price of those goods to the supplier:Provided that—

(a)in any case where the deduction of input tax referred to in that proviso has been made by any other person, where that supplier and that other person are connected persons, the consideration in money for that supply shall be deemed to be an amount equal to the greater of the purchase price of those goods to that supplier and the purchase price of those goods to that other person;

(b)for the purposes of this subsection, the purchase price of any goods shall not be reduced by any amount of input tax deducted under subsection (3) of section fifteen by the supplier or, as the case may be, any other person where the supplier and that other person are connected persons.

(11)Where goods or services are deemed to be supplied by a registered operator under subsection (3) of section seventeen, the consideration in money for the supply shall be deemed to be an amount equal to the cash equivalent of the benefit or advantage granted to the employee or office holder, as contemplated in subsection (7) of section eight.

(12)Where services are or are deemed by subsection (5) of section seven to be supplied to any public authority or local authority by any registered operator the consideration in money for such supply shall be deemed to be the amount of any payment made from time to time by the authority concerned to or on behalf of the registered operator as contemplated in the said section.

(13)Where by reason of the repossession of goods from a debtor under an instalment credit agreement a supply of such goods is deemed by subsection (9) of section seven to be made by that debtor, the consideration in money for that supply shall be deemed to be an amount equal to the balance of the cash value of the goods, being the cash value thereof applied under subsection (6) in respect of the supply of the goods to the debtor under the said agreement, which has not been recovered on the date on which the supply of the goods by the debtor is deemed by subsection (8) of section eight to be made:Provided that the said balance shall be deemed to be the amount remaining after deducting from the cash value so much of the sum of the payments made by the debtor under the said agreement as, on the basis of an apportionment in accordance with the rights and obligations of the parties to the said instalment credit agreement, may properly be regarded as having been made in respect of the cash value.

(14)Where a service is deemed by subsection (11) of section seven to be supplied to any person, the consideration in money for such supply shall be deemed to be the amount that is received in respect of the bet.

(15)Where a service is deemed by subsection (12) of section seven to be supplied to any registered operator, the consideration in money for such supply shall be deemed to be the amount that is received as a prize or winnings.

(16)Where a right to receive goods or services to the extent of a monetary value stated on any token, voucher or stamp, other than a postage stamp as defined in section 2 of the Postal and Telecommunications Act [Chapter 12:05], and any token, voucher or stamp contemplated in subsection (17) is granted for a consideration in money, the supply of such token, voucher or stamp shall be disregarded for the purposes of this Act, except to the extent, if any, that such consideration exceeds such monetary value.

(17)Where any token, voucher or stamp, other than a postage stamp as defined in section 2 of the Postal and Telecommunications Act [Chapter 12:05], is issued for a consideration in money and the holder thereof is entitled on the surrender thereof to receive goods or services specified on such token, voucher or stamp or which by usage or arrangement entitles the holder to specified goods or services, without any further charge, the value of the supply of the goods or services made upon the surrender of such token, voucher or stamp shall be deemed to be nil.

(18)Where any token, voucher or stamp is issued by any registered operator for no consideration and the holder thereof is entitled on surrender thereof to another person, being the supplier of goods or services, to a discount on the price of goods or services supplied to the holder, the consideration in money for the supply of such goods or services shall be deemed to include the monetary value stated on such token, voucher or stamp:Provided that such monetary value shall be deemed to include tax.

(19)Where any supply of entertainment is made by a registered operator and in terms of section sixteen no deduction of input tax was made in terms of subsection (3) of section fifteen in respect of the acquisition by the registered operator of goods or services for the purpose of such entertainment, the value of such supply shall be deemed to be nil.

(20)Where any supply of medical or dental services or other goods or services is made as contemplated in paragraph (c) of subsection (2) of section sixteen by a scheme referred to in that section, the value of such supply shall be deemed to be nil.

(21)Where a taxable supply is not the only matter to which a consideration relates, the supply shall be deemed to be for such part of the consideration as is properly attributable to it.

(22)Where any supply of goods is deemed to be made as contemplated in subsection (17) of section seven, the consideration in money for such supply shall be deemed to be the total amount of the value placed on the importation of the goods in terms of subsection (2) of section twelve and the amount of tax levied on the importation in terms of paragraph (b) of subsection (1) of section six.

(23)Save as otherwise provided in this section, where any supply is made for no consideration the value of that supply shall be deemed to be nil.

(23a)Every clearing agent shall be deemed to charge a clearance fee of at least fifty dollars United States dollars (or other prescribed amount) on each bill of entry.[subsection inserted by Act 8 of 2015]

10. Zero rating

(1)Where, but for this section, a supply of goods would be charged with tax at the rate referred to in subsection (1) of section six, such supply of goods shall, subject to compliance with subsection (3) of this section, be charged with tax at the rate of zero per centum if—

(a)the supplier has supplied the goods, being movable goods, in terms of a sale or instalment credit agreement and has exported the goods; or

(b)the goods have been supplied in the course of repairing, renovating, modifying or treating any goods to which subparagraphs (ii) or (iv) of paragraph (g) of subsection (2) refers and the goods supplied—

(i)are wrought into, affixed to, attached to or otherwise form part of those other goods; or

(ii)being consumable goods, become unusable or worthless as a direct result of being used in that repair, renovation, modification or treatment process; or

(c)the goods are supplied to a lessee or other person under a rental agreement, charter party or agreement for chartering, if the goods are used exclusively in an export country; or

(d)the goods are supplied to a lessee or other person under a rental agreement, charter party or agreement for chartering, if such goods are used by such lessee or other person exclusively in any commercial, financial, industrial, mining, farming, fishing or professional concern conducted in an export country and payment of rent or other consideration under such agreement is effected from such export country; or

(e)the supply is to a registered operator of a trade or of a part of a trade which is capable of separate operation, where the supplier and the recipient have agreed in writing that such trade or part, as the case may be, is disposed of as a going concern:Provided that—

(i)such trade or part of a trade, as the case may be, shall not be disposed of as a going concern unless—A. such supplier and such recipient have, at the time of the conclusion of the agreement for the disposal of the trade or part of a trade, as the case may be, agreed in writing that such trade or part of a trade, as the case may be, will be an income-earning activity on the date of transfer thereof; andB. the assets which are necessary for carrying on such trade or part of a trade, as the case may be, are disposed of by such supplier to such recipient;

(ii)where the trade or part of a trade, as the case may be, disposed of as a going concern has been carried on in, on or in relation to goods or services applied mainly for purposes of such trade or part of a trade, as the case may be, and partly for other purposes, such goods or services shall, where disposed of to such recipient, for the purposes of this paragraph and section eighteen be deemed to form part of such trade or part of a trade, as the case may be, notwithstanding paragraph (e) of the proviso to the definition of “trade” in section two; or

(f)the supply is to the Reserve Bank, or any bank registered under the Banking Act [Chapter 24:20], of gold in the form of bars, blank coins, ingots, buttons, wire, plate or granules or in solution, which has not undergone any manufacturing process other than the refining thereof or the manufacture or production of such bars, blank coins, ingots, buttons, wire, plate, granules or solution; or

(g)the supply is of such agricultural goods or services as are prescribed in regulations made in terms of section seventy-eight, but subject to such conditions as may be prescribed therein; or[paragraph inserted by section 31 of Act 10 of 2003]

(h)the goods are supplied, as contemplated in subsection (8) of section seven, by a registered operator to or for the purposes of his branch or main business situated in an export country in respect of which paragraph (b) of the proviso to the definition of “trade” in section two are applicable; or

(i)the goods are gold coins supplied as such and which the Reserve Bank has issued in Zimbabwe in accordance with Part VI of the Reserve Bank of Zimbabwe Act [Chapter 22:15], or which remain in circulation:

(j)the goods consist of medicines or allied substances within the meaning of the Medicines and Allied Substances Control Act [Chapter 15:05] which are prescribed for the purposes of this subsection:[paragraph inserted by section 23 of act 29 of 2004]

Provided that paragraphs (a), (b) (c) and (d) of this section shall not apply in respect of any supply of goods by a registered operator if in respect of such goods input tax contemplated in paragraph (b) of the definition of “input tax” in section 2 has been deducted in terms of subsection (3) of section sixteen by that registered operator or any other person where that registered operator and that other person are connected persons.

(2)Where, but for this section, a supply of services would be charged with tax at the rate referred to in subsection (1) of section six, such supply of services shall, subject to compliance with subsection (3) of this section, be charged with tax at the rate of zero per centum where—

(a)the services, not being ancillary transport services, comprise the transport of passengers or goods—

(i)from a place outside Zimbabwe to another place outside Zimbabwe; or

(ii)from a place in Zimbabwe to a place in an export country; or

(iii)from a place in an export country to a place in Zimbabwe;

(b)the services comprise the transport of passengers from a place in Zimbabwe to another place in Zimbabwe to the extent that that transport is by aircraft and constitutes “international carriage” as defined in Article 1 of the Convention set out in the First Schedule to the Carriage by Air Act [Chapter 13:04]; or

(c)the services, including any ancillary transport services, comprise the transport of goods from a place in Zimbabwe to another place in Zimbabwe to the extent that those services are supplied by the same supplier as part of the supply of services to which paragraph (a) applies; or

(d)[paragraph repealed by section 30 of Act 10 of 2003]

(e)the services comprise the transport of goods or any ancillary transport services supplied directly in connection with the exportation from or the importation into Zimbabwe of goods or the movement of goods through Zimbabwe from one export country to another export country, where such services are supplied directly to a person who is not a resident of Zimbabwe and is not a registered operator, otherwise than through an agent or other person; or

(f)the services are supplied directly in connection with land, or any improvement thereto, situated in any export country; or

(g)the services are supplied directly in respect of—

(i)movable property situated in any export country at the time the services are rendered; or

(ii)goods temporarily admitted into Zimbabwe which are exempt from tax on importation in terms of regulations made in terms of section seventy-eight, or[paragraph substituted by section 31 of Act 10 of 2003]

(iii)goods in respect of which paragraph (b) or (c) of the definition of “exported” in section two apply; or

(iv)the repair, maintenance, cleaning or reconditioning of a foreign-going aircraft; or

(h)the services comprise—

(i)the handling, pilotage, salvage or towage of any foreign-going aircraft while situated in Zimbabwe; or;

(ii)services provided in connection with the operation or management of any foreign-going aircraft; or

(iii)services which are prescribed in terms of regulations made in terms of section seventy-eight;

[paragraph substituted by section 301of Act 10 of 2003]or

(i)the services of arranging—

(i)the supply of goods as contemplated in paragraph (b) or (c) of the definition of “exported”; or

(ii)the supply of services referred to in subparagraph (iv) of (g) or paragraph (h); or

(iii)the transport of goods, including ancillary transport services, within Zimbabwe;

for a person who is not a resident of Zimbabwe and is not a registered operator; or

(j)the services comprise the repair, maintenance, cleaning or reconditioning of a railway train operated by a person who is not a resident of Zimbabwe and is not a registered operator; or

(k)the services, not being telecommunication services, are physically rendered elsewhere than in Zimbabwe, supplied to any person who utilises such services in Zimbabwe; or

(l)the services are supplied for the benefit of and contractually to a person who is not a resident of Zimbabwe and who is outside Zimbabwe at the time the services are rendered, not being services which are supplied directly in connection with—

(i)land or any improvement thereto situated inside Zimbabwe; or

(ii)movable property situated inside Zimbabwe at the time the services are rendered, except movable property which—A. is exported to the said person subsequent to the supply of such services; orB. forms part of a supply by the said person to a registered operator and such services are supplied to the said person for purposes of such supply to the registered operator;

and not being services which are the acceptance by any person of an obligation to refrain from carrying on any trade, to the extent that the carrying on of that trade would have occurred within Zimbabwe; or

(m)the services comprise—

(i)the filing, prosecution, granting, maintenance, transfer, assignment, licensing or enforcement, including the incidental supply by the supplier of such services of any other services which are necessary for the supply of such services, of intellectual property rights, including patents, designs, trade marks, copyrights, know-how, confidential information, trade secrets or similar rights; or

(ii)the acceptance by any person of an obligation to refrain from pursuing or exercising in whole or in part any such rights;

where and to the extent that those rights are for use outside Zimbabwe; or

(n)the services comprise the carrying on by a private voluntary organisation of the activities referred to in the definition of “private voluntary organisation” in section 2 of the Private Voluntary Organizations Act [Chapter 17:05] and those services are in terms of subsection (5) of section seven, deemed to be supplied by that organisation to a public authority or local authority; or

(o)the services are supplied, as contemplated in of subsection (8) of section seven, by a registered operator to or for the purposes of his branch or main business situated in an export country in respect of which paragraph II of the proviso to the definition of “trade” in section two are applicable; or

(p)the services are in terms of subsection (5) of section seven, deemed to be supplied to a public authority to the extent that the payment contemplated in that section consists of a transfer payment; or

(q)the services in question are supplied by—

(i)the operator of a facility designated in terms of the Tourism Act [Chapter 14:20] as a tourist facility of a class specified in the First Schedule to the Tourism (Designated Tourist Facilities) (Declaration and Requirements for Registration) Regulations, 1996, published in Statutory Instrument 106 of 1996 (as amended or replaced from time to time);

(ii)the owner of any place (other than a place wherein the owner ordinarily resides) where persons are provided to persons not resident in Zimbabwe, on the payment of a charge, with residential accommodation, whether with or without meals, commonly known as, but not limited to, a “boarding house” or “back-packers’ lodge”;

(iii)the operator of a hunting safari:

Provided that regulations made in terms of section 78 may specify that any such class of services shall not be charged with tax at the rate of zero per centum but be charged with tax at the rate referred to in section 6(1).

[paragraph inserted by Act 11 of 2014]

(3)Where a rate of zero per centum has been applied by any registered operator under a provision of this section, the registered operator shall obtain and retain such documentary proof substantiating the registered operator’s entitlement to apply the said rate under that provision as is acceptable to the Commissioner.

11. Exempt supplies

The supply of any of the following goods or services shall be exempt from the tax imposed in terms of paragraph (a) of subsection (1) of section six—

(a)the supply of any financial services, but excluding—

(i)the supply of short-term insurance by insurance agents or brokers liable to property and insurance commission tax under section 36H of the Income Tax Act [Chapter 23:06]:For the purpose of this subparagraph the short-term insurance in question shall be deemed to be a supply of financial services by the agents or brokers in question, and not by the insurance company or reinsurance company on behalf of which the brokers or agents buy or sell any policy of insurance:Provided tax shall be payable on the amount of the commission earned by such agents or brokers and not on the value of the policy of insurance; and[subparagraph substituted by Act 9 of 2015]

(ii)the supply of financial services other than the supply of short-term insurance which, but for this paragraph, would be charged with tax at the rate of zero per centum under section 10;

[paragraph substituted by Act 8 of 2015]

(b)the supply by any association not for gain of any donated goods or services or any other goods made or manufactured by such association if at least eighty per centum of the value of the materials used in making or manufacturing such other goods consists of donated goods;

(c)the supply of any accommodation in a dwelling—

(i)under an agreement for the letting and hiring of the accommodation; or

(ii)where the supplier is the employer of the recipient, including any employer as defined in paragraph 1 of the Thirteenth Schedule to the Taxes Act, the recipient is entitled to occupy the accommodation as a benefit of his office or employment and his right thereto is limited to the period of his employment or the term of his office or a period agreed upon by the supplier and the recipient;

(d)the supply of leasehold land by way of letting, not being a grant or sale of the lease of that land, to the extent that that land is used or is to be used for the principal purpose of accommodation in a dwelling erected or to be erected on that land;

(e)the supply of land, together with any improvements to such land existing on the date on which the supplier became contractually obliged to supply such land and such existing improvements to the recipient, where such land is situated outside Zimbabwe and such supply is made by way of sale or by way of letting;

(f)the supply by any person in the course of a transport business of any service comprising the transport by that person in a vehicle operated by him of fare-paying passengers and their personal effects by railway or road not being a supply of any such service which, but for this paragraph, would be charged with tax at the rate of zero per centum in terms of paragraph (a) of subsection (2) of section ten;

(g)the supply of any educational or training services in respect of pre-school, primary, secondary, university or technical education, including the education or training of physically or mentally handicapped persons, in any institution which is registered under any law administered by the Ministry responsible for education or higher education;For the purposes of this paragraph “educational or training services” do not include—

(i)the provision of sporting facilities to persons other than students of any institution which is registered under any law administered by the Ministry responsible for education or higher education;

(ii)the supply of accommodation to persons other than to students referred to in subparagraph (i);

(iii)hostel or canteen services supplied to students referred to in subparagraph (i), if such services are provided independently under a contract or other arrangement with an institution referred to in subparagraph (i);

(iv)hostel or canteen services supplied by an institution referred to in subparagraph (i) to persons other than students referred to in subparagraph (i);

[paragraph substituted by section 32 of Act 10 of 2003]

(h)the supply of any medical services by any person or institution;

(i)the supply of any goods or services by an employee organisation to any of its members to the extent that the consideration for such supply consists of membership contributions;

(j)the supply of such goods or services as are prescribed in regulations made in terms of section seventy-eight.[paragraph substituted by section 32 of Act 10 of 2003]

(k)[paragraph deleted by section 33 of Act 8 of 2005]

12. Collection of tax on importation of goods, determination of value thereof and exemptions from tax

(1)For the purposes of this Act goods shall be deemed to be imported into Zimbabwe on the date on which the goods are, in terms of section 36 of the Customs Act, deemed to be imported:Provided that—

(a)goods which are entered for home consumption in terms of the Customs Act shall be deemed to have been imported on the date on which they are so entered;

(b)where any goods have been imported and entered in a warehouse licensed in terms of the Customs Act, but have not been entered for home consumption, any supply of such goods before they are entered for home consumption shall be disregarded for the purposes of this Act.

(2)For the purposes of this Act the value to be placed on the importation of goods into Zimbabwe which are entered for home consumption in terms of the Customs Act shall be deemed to be the value thereof for customs duty purposes, plus any duty, excluding surtax, levied in terms of the said Act in respect of the importation of such goods.[subsection substituted by Act 10 of 2009]

(3)The importation of such goods as are prescribed in regulations made in terms of section seventy-eight shall be exempt from the tax imposed in terms of paragraph (b) of subsection (1) of section six.

(4)The Commissioner and the successor postal company and any other postal licensee may make such arrangements as they may deem necessary—

(a)for the collection, in such manner as they may determine, by the company or licensee on behalf of the Commissioner of the value-added tax payable in terms of this Act in respect of the importation of any goods into Zimbabwe; and

(b)for the exchange of such information as is necessary for the carrying out of such arrangements.

(5)Subject to paragraph (b) of subsection (1) of section six and this section, any provision of the Customs Act relating to the importation, transit and clearance of any goods and the payment and recovery of duty shall apply, mutatis mutandis, as if enacted in terms of this Act, whether or not the said provisions apply for the purposes of any duty levied in terms of the Customs Act.

12A. Deferment of collection of tax on capital goods

(1)Subject to this section and to such conditions as maybe prescribed, where a person produces proof to the satisfaction of the Commissioner that he or she has imported goods of a capital nature for his or her own use, the Commissioner shall authorise a deferment of payment of tax on such goods for a prescribed period not exceeding one hundred and eighty days from the date on which the goods are, in terms of section 36 of the Customs and Excise Act [Chapter 23:02] deemed to have been imported:Provided that the Minister may prescribe different periods for different classes or values of goods of a capital nature.[subsection substituted by Act 11 of 2014]

(2)Where any person in favour of whom a deferment has been authorised in terms of subsection (1)—

(a)sells, re-exports or otherwise disposes of such goods before or after the expiry of the period of the deferment, without having used them in the manner that qualified them for deferment of payment of tax in terms of subsection (1); or

(b)fails to pay the deferred tax by the date which the Commissioner fixes in terms of subsection (1) as the date on which payment of the deferred tax is due;

such person shall become liable, in addition to any tax for which he or she is liable on such disposal, to an additional amount of tax equal to the tax paid or payable by him or her on the expiry of the period of the deferment, together with interest thereon calculated in accordance with section 46:Provided that if the Commissioner is satisfied that the disposal of the goods in question or the delay in paying the deferred tax was not due to an intent to evade the provisions of this section, the Commissioner may waive the payment of the whole or such part of the additional amount of tax payable as the Commissioner thinks fit.[subsection substituted by Act 6 of 2012]

(3)The correct amount of tax and additional tax payable in respect of any goods in terms of this section shall, from the time when it should have been paid, constitute a debt due to the State by the person concerned and shall, at any time after it becomes due, be recoverable in a court of competent jurisdiction by proceedings in the name of the Commissioner, and any goods in a bonded warehouse or in the custody of the Authority and belonging to that person, and any goods afterwards imported or entered for export by the person by whom the tax or additional tax is due, shall, while still under control of the Authority, be subject to a lien for such debt and may be detained by the Authority until such debt is paid, and the claims of the State shall have priority over the claims of all persons upon the said goods of whatever nature and may be enforced by sale or other proceedings if the debt is not paid within three months after the date upon which it became due.

(4)For the purposes of this section—“goods of a capital nature” means—

(a)such plant or machinery as the Minister may, in consultation with the Minister responsible for administering the Mines and Minerals Act [Chapter 21:05], prescribe, which is used exclusively for mining purposes on a registered mining location as defined in the Mines and Minerals Act [Chapter 21:05]; or

(b)such plant, equipment or machinery as the Minister may, in consultation with the Minister responsible for industry, prescribe, which is or will be used exclusively for manufacturing or industrial purposes in, on or in connection with a factory (including spare parts required for the purpose of maintaining or refurbishing such plant, equipment or machinery) other than motor vehicles intended or adapted for use on roads or capable of being so used;[paragraph substituted by section 23 of Act 2 of 2005]

(c)such plant, equipment or machinery as the Minister may, in consultation with the Minister responsible for agriculture, prescribe, which is or will be used exclusively for agricultural purposes (including spare parts required for the purpose of maintaining of refurbishing such plant, equipment or machinery) other than motor vehicles intended or adapted for use on roads or capable of being so used;[paragraph inserted by section 23 of Act 2 of 2005]

(d)such plant, equipment or machinery as the Minister may, in consultation with the Minister responsible for transportation, prescribe, which is or will be used exclusively for the aviation industry (including spare parts required for the purpose of maintaining or refurbishing aircraft and such plant, equipment or machinery) other than motor vehicles intended or adapted for use on roads or capable of being so used.[paragraph inserted by section 23 of Act 2 of 2005]

(e)such medical equipment as the Minister may, in consultation with the Minister responsible for health, prescribe.[paragraph inserted by section 10 of Act 5 of 2010]

12B. Collection of tax on exportation of unbeneficiated lithium, determination of value thereof

(1)Notwithstanding section 10(1), tax at the rate of five per centum on the gross fair market value of unbeneficiated lithium shall be levied on a supplier of such lithium for export from Zimbabwe.In this section, "unbeneticiated lithium", in relation to its exportation from Zimbabwe, means lithium exported for use in automotive or other batteries manufactured outside Zimbabwe, or for the manufacture of lithium carbonate, or for any beneficiation whatsoever outside Zimbabwe.

(2)For the purposes of this Act unbeneticiated lithium shall be deemed to be exported from Zimbabwe on the date on which the lithium is, in tenns of section 60 of the Customs Act [Chapter 23:02], deemed to be exported.

(3)For the purposes of this Act the value to be placed on the expotation of unbeneticiated lithium from Zimbabwe shall be deemed to be—

(a)the market value thereof on the date of exportation as detemined by reference to a reputable metals exchange; or

(b)the value as reflected on the bill of entry or other documnent required in terms of section 54 of the Customs and Excise Act [Chapter 23:02] to be delivered to an officer under that Act;

whichever is the higher value.

(4)Subject to section 6(l)(b), and this section, any provisions of the Customs Act relating to the exportation, transit and clearance of any goods and the payment and recovery of duty shall apply, with such changes as may be necessary as if enacted in terms of this Act, whether or not the said provisions apply for the purposes or any duty levied in terms of the Customs Act.[section repealed by Act 8 of 2015 with effect from 1 January 2015 and reinserted by section 23 of Act 1 of 2018 with effect from 1 January 2018]

12C. Collection of tax on exportation of unbeneficiated hides, determination of value thereof

(1)In this section, “unbeneficiated hide” means any raw or untanned animal hide, but does not include crocodile skin, goat or sheep skin or any hide, skin or hair that is or forms part of a trophy as defined by or under the Parks and Wild Life Act [Chapter 20:14].[subsection substituted by Act 8 of 2014]

(2)Notwithstanding section 10(1), tax at the rate of seventy-five cents per kilogram of unbeneficiated hides shall be levied on a supplier of such raw hides for export from Zimbabwe or fifteen per centum of the export consignment of the hides in question, whichever figure results in a higher tax yield.[subsection substituted by Act 8 of 2015 with effect from 1 October 2015]

(3)For the purposes of this Act unbeneficiated hides shall be deemed to be exported from Zimbabwe on the date on which the unbeneficiated hides are, in terms of section 60 of the Customs Act [Chapter 23:02], deemed to be exported.

(4)For the purposes of this Act the value to be placed on the exportation of unbeneficiated hides from Zimbabwe shall be deemed to be—

(a)the highest price which the hides in question fetched in the country to which they are to be exported for beneficiation in the period of six months before the date of exportation, as notified from time to time by the Authority by notice in the Gazette:Provided that if no such notice was published within the period of six months before the date of exportation, reference may be made to the last such published notice; or

(b)the value as reflected on the bill of entry or other document required in terms of section 54 of the Customs and Excise Act [Chapter 23:02] to be delivered to an officer under that Act;

whichever is the higher value.

(6)Notwithstanding this section, the Minister is hereby authorised by notice in a statutory instrument to prescribe a maximum quota of unbeneficiated hides by weight at or below which no tax in terms of this section shall be chargeable:Provided that the statutory instrument in question shall be laid before the National Assembly and not come into force until the lapse of fourteen sitting days after they are so laid, unless the House has earlier passed a resolution annulling the statutory instrument.[subsection inserted by Act 8 of 2014][section inserted by Act 1 of 2014]

12D. Collection of tax on exportation of unbeneficiated platinum, determination of value thereof

(1)In this section, “unbeneficiated platinum” means platinum ore which has not been subjected to the following processes—

(a)crushing, milling and washing to remove waste material; and

(b)the smelting of the resulting platinum concentrate into pellet or ingot form.

(2)Notwithstanding section 10(1), tax at the rate specified in the table specified below on the value of unbeneficiated platinum shall be levied on a supplier of such platinum for export from Zimbabwe—

(a)if the supplier has built plant in Zimbabwe capable of producing platinum group concentrates, tax at the rate of five per centum on the value of unbeneficiated platinum;

(b)if, additionally to the plant referred to in paragraph (a), the supplier has built plant in Zimbabwe capable of smelting to produce matte, tax at the rate of two comma five per centum on the value of unbeneficiated platinum;

(c)if additionally to the plant referred to in paragraph (a) and (b) the supplier has built in Zimbabwe a base metal refinery capable of recovering base metals, tax at the rate of one per centum on the value of unbeneficiated platinum;

(d)at the rate zero per centum on the value of unbeneficiated platinum in the case of a supplier who begins operations as such on or after the 1st January, 2018, and for a period of five years after that.

[subsection (2) substituted by section 24 of Act 1 of 2018]

(3)For the purposes of this Act unbeneficiated platinum shall be deemed to be exported from Zimbabwe on the date on which the unbeneficiated platinum is, in terms of section 60 of the Customs Act [Chapter 23:02], deemed to be exported.

(4)For the purposes of this Act the value to be placed on the exportation of unbeneficiated platinum from Zimbabwe shall be deemed to be—

(a)the market value thereof on the date of exportation as determined by reference to a reputable metals exchange; or

(b)the value as reflected on the bill of entry or other document required in terms of section 54 of the Customs and Excise Act [Chapter 23:02] to be delivered to an officer under that Act;

whichever is the higher value.

(5)Subject to section 6(1)(b), and this section, any provision of the Customs Act relating to the exportation, transit and clearance of any goods and the payment and recovery of duty shall apply, with such changes as may be necessary, as if enacted in terms of this Act, whether or not the said provisions apply for the purposes of any duty levied in terms of the Customs Act.[section 12D inserted by Act 1 of 2014. Despite section 14(2) of the Act 1 of 2014, section 12D has effect from the year of assessment beginning on 1 January 2022 (see section 16 of Act 1 of 2019)]

12E. Collection of tax on exportation of uncut and cut dimensional stone, determination of value thereof

(1)Notwithstanding section 10(1), tax at the rate of—

(a)five per centum on the gross fair market value of uncut dimensional stone (that is to say marble or black granite hewn on location at the quarry with no or minimal trimming, drilling, cutting or grinding) shall be levied on a supplier of such stone for export from Zimbabwe;

(b)two comma five per centum on the gross fair market value of cut dimensional stone (that is to say, marble or black granite sawn into sheets not exceeding a thickness of five (5) centimetres) shall be levied on a supplier of such stone for export from Zimbabwe:Provided that no tax shall be payable if the sheets of cut dimensional stone are smoothed at the edges and polished in Zimbabwe.

(2)For the purposes of this Act uncut or cut dimensional stone shall be deemed to be exported from Zimbabwe on the date on which such stone is, in terms of section 60 of the Customs Act [Chapter 23:02], deemed to be eported.

(3)For the purposes of this Act the value to he placed on the exportation of uncut or cut dimensional stone from Zimbabwe shall be deemed to be—

(a)the market value thereof on the date of exportation as determined by reference to a reputable exchange; or

(b)the value as reflected on the bill of entry or other document required in tenns of section 54 of the Customs and Excise Act [Chapter 23:02] to be delivered to an officer under that Act;

whichever is the higher value.

(4)Subject to section 6(1)(b), and this section, any provision of the Customs Act relating to the exportation, transit and clearance of any goods and the payment and recovery of duty shall apply, with such changes as may be necessary, as if enacted in terms of this Act, whether or not the said provisions apply for the purposes of any duty levied in terms of the Customs Act.[section repealed by Act 8 of 2015 with effect from 1 January 2015 and reinserted by section 25 of Act 1 of 2018 with effect from 1 January 2018]

13. Collection of value-added tax on imported services, determination of value thereof and exemptions from tax

(1)Where tax is payable in terms of paragraph (c) of subsection (1) of section six in respect of the supply of imported services the recipient shall within thirty days of the date referred to in subsection (2)—

(a)furnish the Commissioner with a declaration, in such form as the Commissioner may prescribe, containing such information as may be required; and

(b)calculate the tax payable on the value of the imported services at the rate of tax in force on the date of supply of the imported services and pay such tax to the Commissioner.

[subsection amended by section 34 of Act 8 of 2005 and Act 6 of 2006]]

(2)For the purposes of this Act, a supply of imported services shall be deemed to take place at the time an invoice is issued by the supplier or recipient in respect of that supply or the time any payment is made by the recipient in respect of that supply, whichever time is the earlier.

(2a)[subsection repealed by Act 6 of 2006].

(3)For the purposes of this Act, the value to be placed on the supply of imported services shall, save as otherwise provided in this section, be the value of the consideration for the supply, as determined in terms of subsection (3) of section nine, or the open market value of the supply, whichever is the greater.

(4)Where a person carries on activities outside Zimbabwe which do not form part of the activities of any trade carried on by him and, in the course of such first-mentioned activities, services are rendered for the purposes of such trade which, if rendered by anybody other than the said person, would be imported services, such services shall for the purposes of paragraph (c) of subsection (1) of section six, be deemed to be imported services supplied and received by that person in respect of such trade.

(5)The tax chargeable in terms of paragraph (c) of subsection (1) of section six, shall not be payable in respect of—

(a)a supply which is chargeable with tax in terms of paragraph (a) of subsection (1) of section six at the rate provided in section six; or

(b)a supply which, if made in Zimbabwe, would be charged with tax at the rate of zero per centum applicable in terms of section ten or would be exempt from tax in terms of section eleven.

14. Accounting basis

(1)In this section—“payment” shall mean payment of consideration which reduces or discharges any obligation, whether an existing obligation or an obligation which will arise in future, in respect of or consequent upon, whether directly or indirectly, the purchase price.

(2)Every registered operator shall account for tax payable on an invoice basis for the purposes of section fifteen:Provided that regulations made under section seventy-eight may provide for circumstances where, upon a written application to the Commissioner, a registered operator may account for tax payable on a payments basis.

15. Calculation of tax payable

(1)The tax payable by a registered operator shall be calculated by him in accordance with this section in respect of each tax period during which he has carried on a trade in respect of which he is registered or is required to be registered in terms of section twenty-three.

(2)No deduction of input tax shall be made in terms of this Act in respect of a supply or the importation of any goods into Zimbabwe, unless—

(a)a tax invoice or debit note or credit note in relation to that supply has been provided in accordance with sections twenty or twenty-one within the period the registered operator is required to furnish a return in terms of sections twenty-seven and twenty-eight or twelve months, whichever is the longer period and is held by the registered operator making that deduction at the time that any return in respect of that supply is furnished:Provided that if the registered operator can show good cause to the Commissioner for extending the time for claiming a deduction of amount of input tax, the Commissioner may allow such a claim from the time a registered operator was required to make a return.[paragraph (a) amended by section 26 of Act 29 of 2004, by section 24 of Act 2 of 2005 and by section 17 of Act 1 of 2019]

(b)a tax invoice is, in terms of subsection (5) or (6) of section twenty, not required to be issued or a debit or credit note is, in terms of section twenty-one not required to be issued, or

(c)sufficient records are maintained as required by subsection (7) of section twenty where the supply is a supply of second-hand goods or a supply of goods as contemplated in subsection (9) of section seven and in either case is a supply to which that section relates; or

(d)a bill of entry or other document prescribed in terms of the Customs Act in relation to the said importation has been delivered in accordance with that Act and is held by the registered operator making that deduction, or by his agent as contemplated in subsection (6) of section fifty-six, at the time that any return in respect of that importation is furnished:Provided that—

(i)no bill of entry or other document prescribed in terms of the Customs Act may be used for the purposes of this paragraph by a registered operator after a period of twelve months from the date on which it was delivered to the registered operator or his or her agent;

(ii)where a tax invoice or debit note or credit note in relation to that supply has been provided in accordance with this Act, or a bill of entry or other document has been delivered in accordance with the Customs Act, as the case may be, the Commissioner may determine that no deduction for input tax in relation to that supply or importation shall be made unless that tax invoice or debit note or credit note or that bill of entry or other document is retained in accordance with section 57(3).

[proviso substituted by Act 1 of 2014]

(3)Subject to subsection (2) of this section and sections fourteen and sixteen, the amount of tax payable in respect of a tax period shall be calculated by deducting from the sum of the amounts of output tax of the registered operator which are attributable to that period, as determined under subsection (4), and the amounts, if any, received by the registered operator during that period by way of refunds of tax charged in terms of paragraphs (b) and (c) of subsection (1) and subsection (3) of section six, the following amounts, namely—

(a)the amounts of input tax—

(i)in respect of supplies of goods and services, not being supplies of second-hand goods to which paragraph (b) of the definition of “input tax” in section two applies, and supplies referred to in subparagraph (iii)) made to the registered operator during that tax period;

(ii)in respect of supplies of second-hand goods to which paragraph (b) of the definition of “input tax” in section two applies—A. other than supplies in respect of which subparagraph B applies, to the extent that payment of any consideration which has the effect of reducing or discharging any obligation, whether an existing obligation or an obligation which will arise in the future, relating to the purchase price for those supplies has been made during that tax period;B. which consist of fixed property in respect of the acquisition of which stamp duty is, in terms of the Stamp Act, payable, if the full or final amount of such stamp duty has been paid during that tax period;

(iii)in respect of taxable supplies made to the registered operator in respect of which paragraph (d) of subsection (3) of section eight, apply, other than supplies in respect of which subsection (4) of section nine apply, to the extent that payment of any consideration which has the effect of reducing or discharging any obligation, whether an existing obligation or an obligation which will arise in the future, relating to the purchase price for those supplies has been made during that tax period;

(iv)charged in terms of paragraph (b) of subsection (1) of section six in respect of goods imported into Zimbabwe by the registered operator and invoiced or paid, whichever is the earlier, during that tax period;

(v)calculated in accordance with paragraph (b) of subsection (2) or (7) of section twenty-one or subsection (1), (2) or (5) of section twenty-two, as applicable to the registered operator;

(b)an amount equal to the tax fraction of any payment made during the tax period by the registered operator to indemnify another person in terms of any contract of insurance:Provided that this paragraph shall—

(i)only apply where the supply of that contract of insurance is a taxable supply or where the supply of that contract of insurance would have been a taxable supply if the time of performance of that supply had been on or after the 1st January, 2004,;

(ii)not apply where that payment is in respect of the supply of goods or services to the registered operator or the importation of any goods by the registered operator;

(iii)not apply where the supply of that contract of insurance is a supply charged with tax at the rate of zero per centum under section ten and that other person is, at the time that that payment is made, not a registered operator and not a resident of Zimbabwe;

(iv)not apply where that payment results from a supply of goods or services to that other person where those goods are situated outside Zimbabwe or those services are physically performed elsewhere than in Zimbabwe at the time of that supply;

(c)an amount equal to the tax fraction of any amount paid by the supplier of the services contemplated in subsection (11) of section seven as a prize or winnings to the recipient of such services;

(d)an amount equal to the tax fraction of any amount of tax on totalizator transactions or tax on betting levied and paid for the benefit of the Consolidated Revenue Fund by the supplier of the services contemplated in subsection (11) of section seven;

(e)the amounts calculated in accordance with subsection (4) or (5) of section seventeen in relation to any goods or services applied during the tax period as contemplated in that section;

(f)any amount of input tax in relation to any supply in respect of which paragraph (a) of, or the proviso to, subsection (2) of this section has operated to deny a deduction of input tax and the registered operator has obtained, during the tax period, a tax invoice in relation to that supply;

(g)in the case of a registered operator who has supplied goods or services during that tax period otherwise than in terms of subsection (2) of section seventeen, an amount determined in accordance with the formula—A × B × Cin which formula—“A” represents the tax fraction;“B” represents the lesser of—

(i)any of the following amounts--A. the cost, including any tax forming part of such cost, to the registered operator of the acquisition, manufacture, assembly, construction or production of those goods or services:Provided that where the goods or services were acquired under a supply in respect of which the consideration in money was in terms of subsection (4) of section nine deemed to be the open market value of the supply or would in terms of that section have been deemed to be the open market value of the supply, the cost of those goods or services shall be deemed to include such open market value to the extent that it exceeds the consideration in money for that supply; orB. the amount which was represented by “B” in the formula contemplated in subsection (4) of section seventeen when such goods or services were deemed to be supplied to the registered operator, where the registered operator was at some time after the acquisition of such goods or services deemed by subsection (4) of section seventeen to have been supplied with such goods or services; orC. the amounts then represented by “A” in the said formula or by “B” in the formula contemplated in subsection (5) of section seventeen respectively, in the most recent adjustment made under subsections (2) or (5) of section seventeen by the registered operator prior to such deemed supply of goods or services where the registered operator was at some time after the acquisition of the goods or services required to make an adjustment contemplated in subsections (2) or (5) of section seventeen; and

(ii)the open market value of the supply of those goods or services at the time those goods or services are deemed to be supplied;

“C” represents the percentage that, immediately before the time of the supply, the use or application of the goods or services for the purpose other than that of making taxable supplies was of the total use or application of the goods or services;

(h)an amount equal to the tax fraction of any payment made by the registered operator during the tax period in respect of the redemption with him, or his agent, of the monetary value of any token, voucher or stamp contemplated in subsection (18) of section nine, to a supplier of goods or services who has granted a discount on the surrender to him of such token, voucher or stamp by a recipient of a supply of goods or services;

(i)in the case of a registered operator who has, during the tax period, supplied a property in possession in the course or furtherance of his trade under a sale, an amount equal to the tax fraction of the lesser of—

(i)the amount, excluding any amount of tax, received in respect of the sale of such property in possession less any amount paid by the registered operator in respect of the acquisition of such property in possession; and

(ii)the amount of the unrecovered loan balance less any amount paid by the registered operator in respect of the acquisition of such property in possession:

Provided that no deduction shall be made in terms of this paragraph where the person in default is or will be held liable for payment of such lesser amount.For the purposes of this subparagraph--“property in possession” means fixed property acquired by any registered operator—

(a)at a sale in execution as a result of default by any person (other than a person who held or applied such fixed property for the purpose of making taxable supplies in the course or furtherance of his trade immediately before such sale in execution) in respect of an unrecovered loan balance due to that registered operator in terms of a credit agreement; or

(b)as a result of an abandonment authorised by the Master of the High Court where such person has defaulted in respect of an unrecovered loan balance due to that registered operator in terms of a credit agreement or gone insolvent;

“unrecovered loan balance” means the amount of capital, interest and administrative holding costs outstanding in terms of a credit agreement at the date of sale in execution or the date of authorisation of abandonment by the Master of the High Court;

(k)an amount equivalent to fifty per centum of the cost of the acquisition of fiscalised electronic registers by a registered operator.[subparagraph substituted by Act 1 of 2014][Please note: numbering as in original.]

(4)For the purposes of subsection (3)—

(a)where any registered operator is entitled under subsection (3) to deduct any amount in respect of any tax period from the sum of the amounts of output tax of the registered operator which are attributable to that period, the registered operator may deduct that amount from the amount of output tax attributable to any later tax period (but not later than the end of the longer period referred to in subsection (2)(a)) to the extent that it has not previously been deducted by the registered operator under that subsection;[paragraph amended by section 24 of Act 2 of 2005]

(b)the amount of input tax which, in relation to any supply of goods or services is to a registered operator, the registered operator may deduct in respect of any payment referred to in subparagraph (ii) of paragraph (a) or subparagraph (i) of paragraph (b) of subsection (3), shall be an amount which bears to the full amount of the input tax relating to that supply the same ratio as the amount of the payment bears to the full value on which tax was payable in respect of the supply.

(5)For the purposes of subsection (3), output tax in relation to a supply made by a registered operator shall be attributable to a tax period—

(a)subject to paragraph (b), where a supply is made or is deemed to be made by him during that tax period; or

(b)where a supply is made under a sale in respect of which paragraph (d) of subsection (3) of section eight applies, other than a supply in respect of which subsection (4) of section nine applies, to the extent that payment of any consideration which has the effect of reducing or discharging any obligation, whether an existing obligation or an obligation which will arise in the future, relating to the purchase price for that supply has been made during that tax period.

(6)If, in relation to any tax period of any registered operator, the aggregate of the amounts that may be deducted under subsection (3) from the sum referred to in that subsection, the amount, if any, brought forward from the tax period preceding the first-mentioned tax period as provided in paragraph (b) of the proviso to subsection (1) of section forty-four and the amount, if any, credited under subsection (4) of section forty-four to the registered operator’s account during the first-mentioned tax period, exceeds the said sum, the amount of the excess shall, subject to this Act, be refundable to the registered operator by the Commissioner as provided in subsection (1) of section forty-four.

16. Permissible deductions in respect of input tax

(1)Where goods or services are acquired or imported by a registered operator partly for consumption, use or supply (hereinafter referred to as “the intended use”) in the course of making taxable supplies and partly for another intended use and tax has become payable in respect of the supply to him or the importation by him, as the case may be, of such goods or services or in respect of such goods under subsection (3) of section six or where tax is the tax fraction of an amount or consideration in respect of a supply contemplated in paragraph (b) or (c) of the definition of “input tax” in section two, the extent to which the tax concerned is input tax, as contemplated in the definition of “input tax” in section two, shall be an amount which bears to the full amount of such tax the same ratio as the intended use of such goods or services in the course of making taxable supplies bears to the total intended use of such goods or services:Provided that—

(a)where the intended use of goods or services in the course of making taxable supplies is equal to not less than ninety per centum of the total intended use of such goods or services, the goods or services concerned may for the purposes of this Act be regarded as having been acquired wholly for the purpose of making taxable supplies; and

(b)where goods or services are deemed by paragraph (b) of subsection (3) of section eight to be successively supplied, the extent to which the tax relating to any payment referred to in that section is input tax may be estimated where the calculation cannot be made accurately until the completion of the supply of the goods or services, and in such case such estimate shall be adjusted on completion of the supply, any amount of input tax which has been overestimated being accounted for as output tax in the tax period during which the completion occurs and any amount of input tax which has been underestimated being accounted for as input tax in that period.

(2)Notwithstanding anything to the contrary in this Act, a registered operator shall not be entitled to deduct from the sum of the amounts of output tax and refunds contemplated in subsection (3) of section fifteen, any amount of input tax—

(a)in respect of goods or services acquired by such registered operator to the extent that such goods or services are acquired for the purposes of entertainment:Provided that this paragraph shall not apply where—

(i)such goods or services are acquired by the registered operator for making taxable supplies of entertainment in the ordinary course of a trade which—A. continuously or regularly supplies entertainment to clients or customers, other than in the circumstances contemplated in paragraph (b), for a consideration to the extent that such taxable supplies of entertainment are made for a charge which covers all direct and indirect costs of such entertainment or is equal to the open market value of such supply of entertainment, unless—I. such costs or open market value is for bona fide promotion purposes not charged by the registered operator in respect of the supply to recipients who are clients or customers in the ordinary course of the trade, of entertainment which is in all respects similar to the entertainment continuously or regularly supplied to clients or customers for consideration; orII. the goods or services were acquired by the registered operator for purposes of making taxable supplies to such clients or customers of entertainment which consists of the provision of any food and a supply of any portion of such food is subsequently made to any employee of the registered operator or to any private voluntary organisation as all such food was not consumed in the course of making such taxable supplies;B. supplies entertainment to any employee or office holder of the registered operator or any connected person in relation to the registered operator, to the extent that such taxable supplies of entertainment are made for a charge which covers all direct and indirect costs of such entertainment;

(ii)such goods or services are acquired by the registered operator for consumption or enjoyment by that registered operator, including, where the registered operator is a partnership, a member of such partnership, or an employee or office holder of such registered operator for personal subsistence in respect of any night that such registered operator or member is by reason of the registered operator’s trade or, in the case of such employee or office holder, he is by reason of the duties of his employment or office, obliged to spend away from his usual place of residence:Provided that this provision shall not extend to expenditure for amusement or recreation;

(iii)such goods or services consist of a meal or refreshment supplied by the registered operator as operator of any conveyance to a passenger in such conveyance during a journey, if such meal or refreshment is supplied as part of or in conjunction with the transport service supplied by the registered operator and the supply of such service is a taxable supply;

(iv)such goods or services consist of a meal or refreshment supplied by the registered operator as organiser of a seminar or similar event to a participant in such seminar or similar event, if the supply of such meal or refreshment is made during the course of or immediately before or after such seminar or similar event and a charge which covers the cost of such meal or refreshment is made by the registered operator to the recipient;

(v)such goods or services are acquired by a local authority for the purpose of providing sporting or recreational facilities or public amenities to the public in the circumstances referred to in subsection (5) of section seven or for the purposes of the provision of the goods or services referred to in subparagraph (iv) of paragraph (c) of the definition of “trade” in section two;

(vi)such goods or services are acquired by a private voluntary organisation, for the purpose of making supplies in the furtherance of its aims and objects; or

(b)in respect of any fees or subscriptions paid by the registered operator in respect of membership of any club, association or society of a sporting, social or recreational nature; or

(c)in respect of any goods or services acquired by a superannuation scheme referred to in section two, for the purposes of the supply by such scheme of any medical or dental services or services directly connected with such medical or dental services or of any goods necessary for or subordinate or incidental to the supply of any such services; or

(d)in respect of any motor vehicle supplied to or imported by the registered operator:Provided that this paragraph shall not apply where such motor vehicle is acquired by the registered operator—

(i)exclusively for the purposes of the trade or in the production of income of the registered operator and of a type specified in the Charging Act or in regulations made in terms of section seventy-eight;

(ii)in the ordinary course of his or her trade as a motor dealer.

For the purposes of this paragraph a motor vehicle acquired by such registered operator for demonstration purposes or for temporary use prior to a taxable supply by such registered operator shall be deemed to be acquired exclusively for the purpose of making a taxable supply;

(d1)in respect of any amount of tax on the exportation of unbeneficiated chrome, unbeneficiated hides, unbeneficiated platinum or raw diamonds paid by the registered operator in terms of section 12B, 12C, 12D or 12E.[paragraph inserted by Act 1 of 2014]

(e)in respect of any amount of tax on the exportation of unbeneficiated chrome paid by the registered operator in terms of section 12B.[paragraph inserted by Act 5 of 2010]

(e)that results from the application of a rate of exchange in excess of the parity rate of one United States dollar to a bond note unit, if the goods and services in question were acquired by such registered operator in a legal tender other than foreign currency (for the purposes of this paragraph “legal tender other than foreign currency” has the meaning given to that term in section 38(9)).[Please note: numbering as in original.][paragraph (e) added by section 18 of Act 1 of 2019]

(3)Notwithstanding anything in subsection (5) of section fifteen, where a registered operator has made a supply of goods as contemplated in subsection (9) of section seven and in respect of the acquisition thereof by the registered operator a deduction of input tax under subsection (3) of section fifteen was denied in terms of subsection (2) of this section, the registered operator shall not be required to account for output tax in relation to such supply.

(4)Where, but for this subsection, an amount qualifies or has qualified for a deduction under more than one provision of this Act, a deduction of such amount, or any portion thereof, shall not be made more than once in the calculation of the amount of tax payable by any person.

17. Adjustments

(1)Subject to subsection (2) of section seven, where—

(a)goods or services have been supplied to or imported by a registered operator; or

(b)goods have been manufactured, assembled, constructed or produced by him; or

(c)goods or services were deemed by subsection (4) to have been supplied to him;

(i)otherwise than in the circumstances contemplated in subsection (8) of section seven, wholly for a purpose other than the said purpose; or

(ii)wholly for a purpose in respect of which, if such goods or services had been acquired by him at the time of such application, a deduction of input tax would have been denied in terms of subsection (2) of section sixteen;

be deemed to have been supplied by him by way of a taxable supply by him in the course of his trade:Provided that this subsection shall not apply where taxable supplies produced by the registered operator become exempt supplies by vitue of any amendment of this Act.[subsection (1) amended by section 26(a) of Act 1 of 2018]

(2)Where—

(a)capital goods or services have been supplied to or imported by a registered operator; or

(b)capital goods have been manufactured, assembled, constructed or produced by him; or

(c)capital goods or services were deemed by subsection (4) to have been supplied to him;

(excluding goods or services in respect of the acquisition of which by the registered operator a deduction of input tax was denied by subsection (2) of section sixteen or would have been denied if that section had been applicable prior to the 1st January, 2004,) and such goods or services were acquired, manufactured, assembled, constructed or produced by such registered operator wholly or partly for the purpose of consumption, use or supply in the course of making taxable supplies or such goods were held or applied for that purpose, such goods or services shall, if the extent of the application or use of such goods or services in the course of making taxable supplies, in respect of which, if such goods or services had been acquired at the time of such application or use, a deduction of input tax would not have been denied in terms of paragraph (a) of subsection (2) of section sixteen, is subsequently reduced in relation to their total application or use, be deemed to have been supplied by him by way of a taxable supply by him in the course of his trade at the time at which such reduction is deemed by subsection (6) to take place:Provided that this subsection shall not apply—

(a)to any capital goods or services which cost less than fifty thousand dollars or the prescribed amount, excluding tax; or

(b)where such goods or services were deemed to be supplied to the registered operator by subsection (4) if the amount which was represented by "B" in the formula contemplated in that subsection was less than fifty thousand dollars when such goods or services were deemed to be supplied to such registered operator; or

(c)where taxable supplies produced by the registered operator become exempt supplies by virtue of any amendment of this Act.

[subsection (2) amended by section 26(b) of Act 1 of 2018]

(3)Notwithstanding anything in this section, to the extent that any registered operator has or is deemed to have granted a benefit or advantage to an employee or the holder of any office as contemplated in paragraph (f) of the definition of “gross income” in subsection (1) of section 8 of the Taxes Act, as read with the Thirteenth Schedule to that Act, and such benefit or advantage consists of a supply of goods or services, the granting of that benefit or advantage shall be deemed to be a supply of goods or services made by the registered operator in the course of a trade carried on by the registered operator:Provided that this subsection shall not apply to any such benefit or advantage to the extent that it—

(a)has arisen by virtue of any supply of goods or services which is an exempt supply in terms of section eleven or is a supply which is charged with tax at the rate of zero per centum in terms of section ten or is a supply of entertainment;

(b)is granted by the registered operator in the course of making exempt supplies.

(4)Where—

(a)prior to the 1st January, 2004,—

(i)goods or services have been supplied to or imported by a person; or

(ii)goods have been manufactured, assembled, constructed or produced by him;

and such goods or services were acquired, manufactured, assembled, constructed or produced or applied by such person wholly for purposes other than that of consumption, use or supply in the course of making supplies in the course of an activity which was a trade or would have been a trade if section two had been applicable prior to the 1st January, 2004, or for a purpose in respect of which a deduction of input tax in respect of such goods or services would have been denied in terms of subsection (2) of section sixteen if that section had been applicable prior to the 1st January, 2004,; or

(b)after the 1st January, 2004,—

(i)goods or services have been supplied to or imported by a person and tax has been charged in respect of such supply or importation; or

(ii)goods have been manufactured, assembled, constructed or produced by him and tax has been charged in respect of the supply of goods or services acquired by him for the purpose of such manufacturing, assembling, construction or production; or

(iii)goods or services are deemed by subsection (1) or subsection (2) of section seven to have been supplied by him;

and no deduction has been made in terms of subsection (3) of section fifteen in respect of or in relation to such goods or services; or

(c)second-hand goods situated in Zimbabwe have been supplied, otherwise than under a taxable supply, to a person under a sale on or after the 1st January, 2004, by a resident of Zimbabwe and no deduction has been made in terms of subsection (3) of section fifteen in respect of such second-hand goods; and

such goods or services are subsequent to the 1st January, 2004, applied in any tax period by that person or, where he is a member of a partnership, by the partnership, wholly or partly for consumption, use or supply in the course of making taxable supplies, other than taxable supplies in respect of which, if such goods or services had been acquired at the time of such application, a deduction of input tax would have been denied in terms of subsection (2) of section sixteen, those goods or services shall be deemed to be supplied in that tax period to that person or the partnership, as the case may be, and the Commissioner shall allow that person or the partnership, as the case may be, to make a deduction in terms of subsection (3) of section fifteen of an amount determined in accordance with the formula—A × B × C × D,in which formula—“A” represents the tax fraction;“B” represents the lesser of—

(a)the cost, including any tax forming part of such cost, to the registered operator of the acquisition, manufacture, assembly, construction or production of those goods or services:Provided that where the goods or services were acquired under a supply in respect of which the consideration in money was in terms of subsection (4) of section nine deemed to be the open market value of the supply, the cost of those goods or services shall be deemed to include such open market value to the extent that it exceeds the consideration in money for that supply;or

(b)the open market value of the supply of those goods or services at the time when the supply is deemed to be made;

“C” represents the ratio that, immediately after the supply so deemed to be made, the intended use of the goods or services, as contemplated in subsection (1) of section sixteen, in the course of making taxable supplies, other than taxable supplies in respect of which, if such goods or services had been acquired at the time of such application, a deduction of input tax would have been denied in terms of subsection (2) of section sixteen, bears to the total intended use of those goods or services, expressed as a percentage:Provided that where the intended use of goods or services in the course of making taxable supplies, other than taxable supplies in respect of which, if such goods or services had been acquired at the time of such application, a deduction of input tax would have been denied in terms of subsection (2) of section sixteen, is equal to not less than ninety per centum of the total intended use of such goods or services, such percentage shall be deemed to be one hundred per centum;“D” represents, where paragraph (c) of this subsection applies, the ratio that the amount paid, which payment reduces or discharges any obligation (whether an existing obligation or an obligation which will arise in the future) in respect of or consequent upon, whether directly or indirectly, the consideration in money for the supply of second-hand goods, bears to the total consideration in money, expressed as a percentage:Provided that—

(a)paragraph (b) of this subsection shall not apply where a registered operator has, only as a result of not complying with subsection (2) of section fifteen, not been entitled to make a deduction of input tax in terms of subsection (3) of section fifteen;

(b)where the second-hand goods referred to in paragraph (c) of this subsection consist of fixed property in respect of the acquisition of which stamp duty is, in terms of the Stamp Act, payable or would have been payable had an exemption from stamp duty, whether in terms of the Stamp Act or any other Act of Parliament, not been applicable, the amount determined in terms of this subsection shall not exceed the amount of stamp duty, which is or would have been payable in respect of such acquisition;

(c)where the second-hand goods referred to in paragraph (c) of this subsection consist of fixed property in respect of the acquisition of which stamp duty is, in terms of the Stamp Act, payable, the deduction in terms of subsection (3) of section fifteen shall be made only after such stamp duty has been paid.

(5)Where—

(a)capital goods or services have been supplied to or imported by a registered operator; or

(b)capital goods have been manufactured, assembled, constructed or produced by him; or

(c)capital goods or services were deemed by subsection (4) to have been supplied to him;

and such goods or services were acquired, manufactured, assembled, constructed or produced or applied by such registered operator partly for the purpose of consumption, use or supply in the course of making taxable supplies, other than taxable supplies in respect of which, if such goods or services had been acquired at the time of such application, a deduction of input tax would have been denied in terms of subsection (2) of section sixteen, or of making supplies in the course of an activity which was a trade or would have been a trade if section two had been applicable prior to the 1st January, 2004,, other than supplies in respect of which, if such goods or services had been acquired at the time of such application, a deduction of input tax would have been denied in terms of subsection (2) of section sixteen if that section had been applicable prior to the 1st January, 2004,, such goods or services shall, if the extent of the application or use of such goods or services in the course of making taxable supplies, other than taxable supplies in respect of which, if such goods or services had been acquired at the time of such application, a deduction of input tax would have been denied in terms of subsection (2) of section sixteen, is subsequent to the 1st January, 2004, increased in relation to their total application or use, be deemed to be supplied to him, and the Commissioner shall allow the registered operator to make a deduction in terms of subsection (3) of section fifteen, in the tax period during which such increase is deemed by subsection (6) to take place, of an amount determined in accordance with the formula—A × B × (C  D),in which formula—“A” represents the tax fraction;“B” represents the lesser of—

(a)the—

(i)cost, including any tax forming part of such cost, to the registered operator of the acquisition, manufacture, assembly, construction or production of those goods or services:Provided that where the goods or services were acquired under a supply in respect of which the consideration in money was in terms of subsection (4) of section nine deemed to be the open market value of the supply the cost of those goods or services shall be deemed to include such open market value to the extent that it exceeds the consideration in money for that supply; or

(ii)amount, where goods or services were deemed by subsection (4) to have been supplied to the registered operator, which was represented by “B” in the formula contemplated in that subsection when such goods or services were deemed to be supplied to the registered operator; or

(iii)amounts, where the registered operator was at some time after the acquisition of the goods or services required to make an adjustment contemplated in subsection (2) or this subsection, represented by “A” in the formula contemplated in subsection (8) of section nine or by “B” in the formula contemplated in this subsection respectively, in the most recent adjustment made under subsection (2) or this subsection by the registered operator prior to such supply of goods or services so deemed to be made;

and

(b)the open market value of the supply of those goods or services at the time any increase in the extent of the use or application of the goods or services is deemed by subsection (6) to take place;

“C” represents the percentage that, during the twelve month period during which the increase in use or application of the goods or services is deemed to take place, the use or application of the goods or services for the purposes of making taxable supplies, other than taxable supplies in respect of which, if such goods or services had been acquired at the time of such application, a deduction of input tax would have been denied in terms of subsection (2) of section sixteen, was of the total use or application of the goods:Provided that where the said percentage does not exceed the percentage contemplated in “D” by more than ten per centum of the total use or application, the said percentage shall be deemed to be the percentage determined in “D”;“D” represents the percentage that the use or application of the goods or services for the purposes of making taxable supplies, other than taxable supplies in respect of which, if such goods or services had been acquired at the time of such application, a deduction of input tax would have been denied in terms of subsection (2) of section sixteen, was of the total use or application of such goods or services determined in terms of subsection (1) of section sixteen, subsection (8) of section nine, or subsection (4) of this section or this subsection, whichever was applicable in the period immediately preceding the twelve month period contemplated in “C”:Provided that—

(a)this subsection shall not apply to any capital goods or services which cost less than fifty thousand dollars or the prescribed amount, excluding tax, or where such goods or services were deemed to be supplied to the person by subsection (4) if the amount which was represented by “B” in the formula contemplated in that subsection was less than fifty thousand dollars or the prescribed amount when such goods or services were deemed to be supplied to such person; or

(a1)this subsection does not apply where taxable supplies produced by the registered operator become exempt supplies by virtue of any amendment of this Act;[paragraph (a1) inserted by section 26(c) of Act 1 of 2018]

(b)where such goods or services consist of second-hand goods contemplated in the proviso to paragraph (b) of the definition of “input tax” in section two, the amount determined in terms of this subsection shall not exceed the amount of stamp duty which is or would have been payable, less any amount which has previously been deducted in terms of in terms of subparagraph (ii) of paragraph (a) of subsection (3), or subparagraph (i) of paragraph (b) of subsection (3) of section fifteen, or subsection (4) of this section, in respect of such acquisition, original issue or registration of transfer, as the case may be.

(6)For the purposes of subsections (2) and (5), any reduction or increase in the extent of the application or use of goods or services shall be deemed to take place on the last day of the registered operator’s year of assessment as defined in section two of the Taxes Act or, if the registered operator is not an income tax payer, on the last day of December:Provided that where a registered operator who is not an income tax payer draws up annual financial statements in respect of a year or other period ending on a date other than the last day of December any reduction or increase in the extent of the application or use of goods or services shall be deemed to take place on such first-mentioned date.

(7)For the purposes of subsections (2) and (5) of this section, the extent of the application or use of any goods or services for the purpose of making taxable supplies shall be determined with reference to the application or use of such goods or services during the twelve month period ending on the day any reduction or increase in the extent of the application or use of such goods or services is deemed by subsection (6) to have taken place:Provided that—

(a)where any goods or services are acquired, manufactured, assembled, constructed or produced by a registered operator or are deemed under subsection (4) to have been supplied to that registered operator during such twelve month period, the extent of the application or use of such goods or services shall be determined with reference to the period ending on the day contemplated in subsection (6) and commencing on the date such goods or services are acquired, manufactured, assembled, constructed or produced by the registered operator or are deemed to be supplied to the registered operator under subsection (4);

(b)where the period between the 1st January, 2004, and the date contemplated in subsection (6) is less than a twelve month period it shall, for the purposes of this section, be deemed to be a twelve month period.

(8)Where a deduction of an amount contemplated in paragraph (b) of the definition of “input tax” in section two has been made by any registered operator in respect of the sale to him of any second-hand goods and subsequently—

(a)that sale is cancelled; or

(b)the nature of that sale is fundamentally varied or altered; or

(c)the previously agreed consideration for that sale is reduced; or

(d)the second-hand goods or part of the second-hand goods sold are returned to the supplier;

and, as a result of the occurrence of one or more of the above mentioned events, the input tax actually deducted in relation to such sale exceeds the input tax properly deductible by the registered operator, either the amount of that excess shall be deemed to be tax charged in relation to a taxable supply made by that registered operator in the tax period during which the said event has occurred, at the rate of tax which applied when the said deduction was made, or the amount of input tax deducted in terms of subsection (3) of section fifteen in the said tax period shall be reduced by the amount of the said excess.

18. Adjustments in consequence of acquisition of going concern wholly or partly for purposes other than making taxable supplies

(1)Where—

(a)a trade or part of a trade has been supplied to any registered operator; and

(b)the supply of such trade or part was charged with tax at the rate of zero per centum in terms of paragraph (e) of subsection (1) of section ten; and

(c)such trade or part, as the case may be, or any goods or services which formed part of such trade or part are acquired by such registered operator wholly or partly for a purpose other than for consumption, use or supply in the course of making taxable supplies;

such trade, part, goods or services, as the case may be, shall be deemed to have been supplied by him by way of a taxable supply by him in the course of his trade:Provided that where the intended use of such trade, part, goods or services, as the case may be, in the course of making taxable supplies is equal to not less than ninety per centum of the total intended use of such trade, part, goods or services, as the case may be, the trade, part, goods or services concerned may for the purposes of this Act be regarded as having been acquired wholly for the purpose of consumption, use or supply in the course of making taxable supplies.

(2)Notwithstanding anything in this Act, the value of the supply deemed by subsection (1) to have been made by the registered operator, shall be the full cost to such registered operator of acquiring such trade, part, goods or services, as the case may be, reduced by an amount which bears to the amount of such full cost the same ratio as the intended use or application of the trade, part, goods or services in the course of making taxable supplies bears to the total intended use or application of the trade, part, goods or services:Provided that—

(a)the cost to such registered operator of acquiring such trade, part, goods or services may be reduced by any amount which represents an appropriate allocation of such full cost to the acquisition of any goods or services which form part of such trade or part of a trade and in respect of the acquisition of which by the registered operator a deduction of input tax would be denied by section subsection (2) of section sixteen; or

(b)where such trade, part, goods or services were acquired—

(i)by means of a supply made by a registered operator for no consideration or for a consideration in money which is less than the open market value of the supply; and

(ii)in circumstances where the supplier and the recipient are connected persons;

the cost of such trade, part, goods or services shall be deemed to be the open market value of the supply of such trade, part, goods or services.

(3)Notwithstanding anything in this Act, the supply deemed by subsection (1) to have been made by the registered operator shall be deemed to be made in the tax period in which the supply of the trade or part of a trade is made.

(4)For the purposes of this section and subsection (9) of section nine and subsections (4) and (5) of section seventeen, the cost to the registered operator of any goods or services acquired by a registered operator in the circumstances contemplated in subsection (1) shall be deemed to be an amount equal to the aggregate of an amount which represents an appropriate allocation of the full cost to the registered operator of the trade or part of a trade to those specific goods or services and an amount determined by applying the rate of tax applicable at the time of supply contemplated in subsection (3) to the amount of such appropriate allocation.

19. Goods or services acquired before incorporation

Any company, being a registered operator, shall, where any amount of tax has been charged in terms of section six in relation to the acquisition of goods or services for or on behalf of that company or in connection with the incorporation of that company, and those goods or services were acquired prior to incorporation by a person who—

(a)was reimbursed by the company for the whole amount of the consideration paid for the goods or services; and

(b)acquired those goods or services for the purpose of a trade to be carried on by the company and has not used those goods or services for any purpose other than carrying on such trade;

be deemed to be the recipient of the goods or services and to have paid the tax so charged as if the supply or the payment of the tax had been made during the tax period in which the reimbursement referred to in paragraph (a) is made:Provided that this section shall not apply in relation to any goods or services where—

(a)the supply of those goods or services by that person to the company is a taxable supply, or is a supply of second-hand goods not being a taxable supply; or

(b)those goods or services were so acquired more than six months prior to the date of incorporation of the company; or

(c)the company does not hold sufficient records to establish the particulars relating to the deduction to be made.

20. Tax invoices

(1)Except as otherwise provided in this section, a supplier, being a registered operator, making a taxable supply, other than a supply contemplated in subsection (9) of section seven, to a recipient shall provide that recipient within thirty days from the date of supply with a tax invoice containing such particulars as are specified in this section:Provided that—

(a)it shall not be lawful to issue more than one tax invoice for each taxable supply;

(b)if a registered operator claims to have lost the original tax invoice, the supplier or the recipient, as the case may be, may provide a copy clearly marked “copy”.

(2)Where a recipient, being a registered operator, creates a document containing the particulars specified in this section and purporting to be a tax invoice in respect of a taxable supply of goods or services made to the recipient by a supplier, being a registered operator, that document shall be deemed to be a tax invoice provided by the supplier under subsection (1) of this section where—

(a)the Commissioner has granted prior approval for the issue of such documents by a recipient or recipients of a specified class in relation to the taxable supplies or taxable supplies of a specified category to which the documents relate; and

(b)the supplier and the recipient agree that the supplier shall not issue a tax invoice in respect of any taxable supply to which this subsection applies; and

(c)such document is provided to the supplier and a copy thereof is retained by the recipient:

Provided that where a tax invoice is issued in accordance with this subsection, any tax invoice issued by the supplier in respect of that taxable supply shall be deemed not to be a tax invoice for the purposes of this Act.

(3)Where a supply of goods is deemed by subsection (9) of section seven to be made and both the recipient and the supplier in relation to that supply are registered operators, the recipient shall, within thirty days after the day on which such supply is deemed by subsection (9) of section seven to be made, create and furnish to the supplier a document which contains the particulars specified in this section, and such document shall for the purposes of this Act be deemed to be a tax invoice provided by the supplier under subsection (1) of this section.

(4)Except as the Commissioner may otherwise allow, and subject to this section, a tax invoice shall contain the following particulars—

(a)the words “tax invoice” or “fiscal tax invoice” (or other word or phrase employed by the fiscalised recording regulations for the purpose of denoting an invoice of tax for the making of taxable supplies) in a prominent place;[definition substituted by Act 4 of 2012]

(b)the name, address and registration number of the supplier;

(c)name and address of the recipient and, if the recipient is a registered operator, the registration number of the recipient;[paragraph amended by section 27 of Act 29 of 2004]

(d)an individual serialised number and the date upon which the tax invoice is issued;

(e)a description of the goods or services supplied;

(f)the quantity or volume of the goods or services supplied;

(g)either—

(i)the value of the supply, the amount of tax charged and the consideration for the supply; or

(ii)where the amount of tax charged is calculated by applying the tax fraction to the consideration, the consideration for the supply and either the amount of the tax charged, or a statement that it includes a charge in respect of the tax and the rate at which the tax was charged.

(5)Notwithstanding any other provision of this Act, a supplier shall not be required to provide a tax invoice if the total consideration for a supply is in money and does not exceed one hundred dollars or the prescribed amount.

(6)Where the Commissioner is satisfied that there are or will be sufficient records available to establish the particulars of any supply or category of supplies, and that it would be impractical to require that a full tax invoice be issued in terms of this section, the Commissioner may, subject to such conditions as he may consider necessary, direct that—

(a)any one or more of the particulars specified in subsection (4) shall not be contained in a tax invoice; or

(b)a tax invoice is not required to be issued.

(7)Notwithstanding anything in this section, where a supplier makes a supply, not being a taxable supply, of second-hand goods or of goods as contemplated in subsection (9) of section seven, to a recipient, being a registered operator, the recipient shall maintain sufficient records to enable the following particulars to be ascertained—

(a)the name and address of the supplier, and where the supplier is—

(i)a natural person, his identity number; or

(ii)not a natural person, the name and identity number of the natural person representing the supplier in respect of the supply and any legally allocated registration number of the supplier:Provided that the recipient—A. shall verify such name and identity number of any such natural person with reference to his identity document, including any duplicate identity document, issued in terms of section 7 of the National Registration Act [Chapter 10:17], and, where the value of the supply is one thousand dollars (or the prescribed amount) or more, retain a photocopy of such identity document; orB. shall verify such name and registration number of any supplier, other than a natural person, with reference to its business letterhead or other similar document and, where the value of the supply is one thousand dollars (or the prescribed amount) or more, retain a photocopy of such name and registration number appearing on such letterhead or document; and

(b)the date upon which the second-hand goods were acquired or the goods were repossessed, as the case may be;

(c)a description of the goods;

(d)the quantity or volume of the goods;

(e)the consideration for the supply:

Provided that this subsection shall not require that recipient to keep such records where the total consideration for that supply is in money and does not exceed one hundred dollars or the prescribed amount.

21. Credit and debit notes

(1)This section shall apply where, in relation to the supply of goods or services by any registered operator—

(a)that supply has been cancelled; or

(b)the nature of that supply has been fundamentally varied or altered; or

(c)the previously agreed consideration for that supply has been altered by agreement with the recipient, whether due to the offer of a discount or for any other reason; or

(d)the goods or services or part of the goods or services supplied have been returned to the supplier, including the return to a registered operator of a returnable container, the registered operator in such case being deemed for the purposes of this Act to have made the supply of the container in respect of which the deposit was charged, whether the supply was made by him or any other person;

and the supplier has—

(i)provided a tax invoice in relation to that supply and the amount shown therein as tax charged on that supply is incorrect in relation to the amount properly chargeable on that supply as a result of the occurrence of any one or more of the above-mentioned events; or

(ii)furnished a return in relation to the tax period in respect of which output tax on that supply is attributable, and has accounted for an incorrect amount of output tax on that supply in relation to the amount properly chargeable on that supply as a result of the occurrence of any one or more of the above mentioned events.

(2)Where a supplier has accounted for an incorrect amount of output tax as contemplated in subsection (1), that supplier shall make an adjustment in calculating the tax payable by the supplier in the return for the tax period during which it has become apparent that the output tax is incorrect, and if—

(a)the output tax properly chargeable in relation to that supply exceeds the output tax actually accounted for by the supplier, the amount of that excess shall be deemed to be tax charged by that supplier in relation to a taxable supply attributable to the tax period in which the adjustment is to be made, and shall not be attributable to any prior tax period; or

(b)the output tax actually accounted for exceeds the output tax properly chargeable in relation to that supply, that supplier shall either make a deduction in terms of subsection (3) of section fifteen, in respect of the amount of that excess, such amount being deemed for the purposes of that section to be input tax, or reduce the amount of output tax attributable to the said tax period in terms of subsection (4) of section fifteen, by the amount of that excess:Provided that the said deduction shall not be made where the excess tax has been borne by a recipient of goods or services supplied by the supplier and the recipient is not a registered operator, unless the amount of the excess tax has been repaid by the supplier to the recipient, whether in cash or by way of a credit against any amount owing to the supplier by the recipient.

(3)Subject to this section, where a tax invoice has been provided as contemplated in subparagraph (i) of paragraph (d) of subsection (1), and—

(a)the amount shown as tax charged in that tax invoice exceeds the actual tax charged in respect of the supply concerned, the supplier shall provide the recipient with a credit note, containing the following particulars—

(i)the words “credit note” in a prominent place;

(ii)the name, address and registration number of the registered operator;

(iii)the name and address of the recipient, except where the credit note relates to a supply in respect of which a tax invoice contemplated in subsection (4) of section twenty, was issued;

(iv)the date on which the credit note was issued;

(v)either—A. the amount by which the value of the said supply shown on the tax invoice has been reduced and the amount of the excess tax; orB. where the tax charged in respect of the supply is calculated by applying the tax fraction to the consideration, the amount by which the consideration has been reduced and either the amount of the excess tax or a statement that the reduction includes an amount of tax and the rate of the tax included;

(vi)a brief explanation of the circumstances giving rise to the issuing of the credit note;

(vii)information sufficient to identify the transaction to which the credit note refers;

(b)the actual tax charged in respect of the supply concerned exceeds the tax shown in the tax invoice as charged, the supplier shall provide the recipient with a debit note, containing the following particulars—

(i)the words “debit note” in a prominent place;

(ii)the name, address and registration number of the registered operator;

(iii)the name and address of the recipient, except where the debit note relates to a supply in respect of which a tax invoice contemplated in subsection (4) of section twenty-three, was issued;

(iv)the date on which the debit note was issued;

(v)either—A. the amount by which the value of the said supply shown on the tax invoice has been increased and the amount of the additional tax; orB. where the tax charged in respect of the supply is calculated by applying the tax fraction to the consideration, the amount by which the consideration has been increased and either the amount of the additional tax or a statement that the increase includes an amount of tax and the rate of the tax included;

(vi)a brief explanation of the circumstances giving rise to the issuing of the debit note;

(vii)information sufficient to identify the transaction to which the debit note refers:

Provided that—A. it shall not be lawful to issue more than one credit note or debit note for the amount of the excess;B. if any registered operator claims to have lost the original credit note or debit note, the supplier or recipient, as the case may be, may provide a copy clearly marked “copy”;C. a supplier shall not be required to provide a recipient with a credit note contemplated in paragraph (a) of this subsection in any case where and to the extent that the amount of the excess referred to in that paragraph arises as a result of, the recipient taking up a prompt payment discount offered by the supplier, if the terms of the prompt payment discount offer are clearly stated on the face of the tax invoice.

(4)Where a recipient, being a registered operator, creates a document containing the particulars specified in this section and purporting to be a credit note or a debit note in respect of a supply of goods or services made to the recipient by a supplier, being a registered operator, the document shall be deemed to be a credit note or, as the case may be, a debit note provided by the supplier under subsection (3) where—

(a)the Commissioner has granted prior approval for the issue of such documents by a recipient or recipients of a specified class in relation to the supplies or supplies of a specified category to which the documents relate; and

(b)the supplier and the recipient agree that the supplier shall not issue a credit note or, as the case may be, a debit note in respect of any supply to which this subsection applies; and

(c)a copy of any such document is provided to the supplier and another copy is retained by the recipient:

Provided that—

(i)where a credit note is issued in accordance with this subsection, any credit note issued by the supplier in respect of that supply shall be deemed not to be a credit note for the purposes of this Act;

(ii)where a debit note is issued in accordance with this subsection, any debit note issued by the supplier in respect of that supply shall be deemed not to be a debit note for the purposes of this Act.

(5)Where the Commissioner is satisfied that there are or will be sufficient records available to establish the particulars of any supply or category of supplies and that it would be impractical to require that a full credit note or debit note be issued in terms of this section, the Commissioner may, subject to any conditions that the Commissioner may consider necessary, direct—

(a)that any one or more of the particulars specified in paragraph (a) or, as the case may be, paragraph (b) of subsection (3) shall not be contained in a credit note or, as the case may be, a debit note; or

(b)that a credit note or, as the case may be, a debit note is not required to be issued.

(6)Where any recipient, being a registered operator, has been issued with a credit note in terms of paragraph (a) of subsection (3), or has written or other notice or otherwise knows that any tax invoice which the registered operator holds is incorrect as a result of any one or more of the events specified in any of paragraphs (a), (b), (c) or (d) of subsection (1) and has made a deduction of any amount of input tax in any tax period in respect of the supply of goods or services to which the credit note or that notice or other knowledge, as the case may be, relates, either the amount of the excess referred to in paragraph (a) of subsection (3) shall be deemed to be tax charged in relation to a taxable supply made by the recipient attributable to the tax period in which the credit note was issued, or that notice or, as the case may be, other knowledge was received, or the amount of input tax deducted in terms of subsection (3) of section fifteen in the last-mentioned tax period shall be reduced by the amount of the said excess, to the extent that the input tax deducted in the first-mentioned tax period exceeds the output tax properly charged.

(7)Where any recipient, being a registered operator, has been issued with a debit note in terms of paragraph (b) of subsection (3) and has made a deduction of any amount of input tax in any tax period in respect of the supply of goods or services to which that debit note relates, the recipient may, subject to section sixteen, make a deduction of input tax in terms of subsection (3) of section fifteen in respect of the amount of the excess referred to in paragraph (b) of subsection (3) in the tax period in which the debit note is issued, to the extent that the output tax properly charged exceeds the input tax deducted.

22. Irrecoverable debts

(1)Where a registered operator—

(a)has made a taxable supply for consideration in money; and

(b)has furnished a return in respect of the tax period for which the output tax on the supply was payable and has properly accounted for the output tax on that supply as required under this Act; and

(c)has written off so much of the said consideration as has become irrecoverable;

the registered operator may make a deduction in terms of subsection (3) of section fifteen, of that portion of the amount of tax charged in relation to that supply as bears to the full amount of such tax the same ratio as the amount of consideration so written off as irrecoverable bears to the total consideration for the supply, the deduction so made being deemed for the purposes of the said section to be input tax:Provided that—

(i)where tax charged in respect of a supply of goods under an instalment credit agreement has become irrecoverable, any deduction in terms of subsection (3) of section fifteen as provided for in this section, shall be restricted to the tax content of the amount which has become irrecoverable in respect of the cash value of such supply, as applicable in respect of that agreement in terms of subsection (6) of section nine;

(ii)the amount which has become irrecoverable in respect of such cash value shall be deemed to be an amount equal to the balance of the cash value remaining after deducting therefrom so much of the sum of the payments made by the debtor in terms of the said agreement as, on the basis of an apportionment in accordance with the rights and obligations of the parties to the said instalment credit agreement, may properly be regarded as having been made in respect of the cash value;

(iii)the said tax content shall be an amount calculated by applying the tax fraction, as applicable at the time the supply under the said instalment credit agreement was in terms of in terms of paragraph (c) of subsection (3) of section eight deemed to have taken place, to the amount deemed as aforesaid to be irrecoverable in respect of such cash value;

(iv)a registered operator who has transferred an account receivable at face value on a—

(i)non-recourse basis to any other person, shall not make any deduction in respect of such transfer in terms of this subsection; or

(ii)recourse basis to any other person, may make a deduction in terms of this subsection only when such account is receivable and is transferred back to him and he has written off so much of the consideration as has become irrecoverable;

(v)the deduction provided for in this subsection shall not be made in terms of subsection (3) of section fifteen in respect of any amount which has become irrecoverable in respect of an instalment credit agreement if the registered operator has repossessed the goods supplied in terms of that agreement.

(2)Where a registered operator—

(a)has made a taxable supply for consideration in money; and

(b)has furnished a return in respect of the tax period for which the output tax on the supply was payable at the rate of tax referred to in subsection (1) of section six, and has properly accounted for the output tax on that supply as required in terms of this Act; and

(c)has transferred the account receivable relating to such taxable supply at face value to another registered operator, hereinafter referred to as “the recipient”, on a non-recourse basis and any amount of the face value, excluding any amount of finance charges or collection costs, of such account receivable has been written off as irrecoverable by the recipient;

the recipient may make a deduction in terms of subsection (3) of section fifteen, of an amount equal to the tax fraction, being the tax fraction applicable at the time such taxable supply is deemed to have been made, of such face value, limited to the amount paid by the recipient in respect of such face value, written off by him, the deduction so made being deemed for the purposes of the said section to be input tax.

(3)Where any amount in respect of which a deduction has been made in accordance with subsection (1) is at any time wholly or partly recovered by the registered operator, or becomes recoverable by him by virtue of the reassignment to him of the underlying debt, that portion of the amount of such deduction as bears to the full amount of such deduction the same ratio as the amount of the irrecoverable debt recovered or reassigned bears to the debt written off shall be deemed to be tax charged in relation to a taxable supply made during the tax period in which the debt is wholly or partly recovered or assigned to such registered operator.

(4)Where a registered operator who is required to account for tax payable on an invoice basis in terms of section fourteen—

(a)has made a deduction of input tax in terms of subsection (3) of section fifteen in respect of a taxable supply of goods or services made to him; and

(b)has, within a period of twelve months after the expiry of the tax period within which such deduction was made, not paid the full consideration in respect of such supply;

an amount equal to the tax fraction, as applicable at the time of such deduction, of that portion of the consideration which has not been paid shall be deemed to be tax charged in respect of a taxable supply made in the next following tax period after the expiry of the period of twelve months:Provided that the period of twelve months shall, if any contract in writing in terms of which such supply was made provides for the payment of consideration or any portion thereof to take place after the expiry of the tax period within which such deduction was made, in respect of such consideration or portion be calculated as from the end of the month within which such consideration or portion was payable in terms of that contract.

(5)If a registered operator who has accounted for tax payable in accordance with subsection (4) at any time thereafter pays any portion of the consideration in respect of the supply in question, he may in terms of subsection (3) of section fifteen make a deduction of input tax of an amount equal to the tax fraction, as applicable at the time of the deduction contemplated in paragraph (a) of subsection (4), of that portion of the consideration so paid.

Part IV – Registration

23. Registration of persons making supplies in the course of trades

(1)Every person who, on or after the 1st January, 2004, carries on any trade and is not registered, becomes liable to be registered—

(a)at the end of any month where the total value of taxable supplies made by that person in the period of twelve months ending at the end of that month in the course of carrying on of business, has exceeded five hundred thousand dollars or the prescribed amount;

(b)at the commencement of any month where there are reasonable grounds for believing that the total value of the taxable supplies to be made by that person in the period of twelve months reckoned from the commencement of the said month will exceed the above mentioned amount:

Provided that—

(a)the total value of the taxable supplies of the registered operator within the period of twelve months referred to in subparagraph (a) or the period of twelve months referred to an subparagraph (b) shall not be deemed to have exceeded or be likely to exceed the amount of five hundred thousand dollars or the prescribed amount, where the Commissioner is satisfied that the said total value will exceed or is likely to exceed such amount solely as a consequence of—

(i)any cessation of, or any substantial and permanent reduction in the size or scale of, any trade carried on by that person; or

(ii)the replacement of any plant or other capital asset used in any trade carried on by that person; or

(iii)abnormal circumstances of a temporary nature;

(b)in calculating the total value of the taxable supplies of a clearing agent, it shall be deemed (notwithstanding anything to the contrary) that, on every bill of entry in the preceding period of twelve months the clearing agent charged a clearance fee of at least fifty dollars United States dollars (or other prescribed amount).

[proviso substituted by Act 8 of 2015]

(2)Every person who, in terms of subsection (1) or section fifty-two, becomes liable to be registered shall not later than thirty days after becoming so liable apply to the Commissioner for registration in such application form as may be prescribed or as the Commissioner may direct and provide the Commissioner with such further particulars and any documentation as the Commissioner may require in such application form for the purpose of registering that person:Provided that where—

(a)a person who applies for registration under this subsection has not provided all particulars and documentation as required by the Commissioner, that person shall be deemed not to have applied for registration until he has provided all such particulars and documentation to the Commissioner;

(b)such person is not a resident of Zimbabwe, such person shall be deemed not to have applied for registration until he has—

(i)appointed a representative registered operator as contemplated in paragraph (f) of subsection (1) of section forty-seven in Zimbabwe and furnished the Commissioner with the particulars of such representative registered operator;

(ii)opened a banking account with any bank, building society or other similar institution for the purposes of his trade carried on in Zimbabwe and furnished the Commissioner with the particulars of such banking account.

(3)Notwithstanding subsections (1) and (2), every person who satisfies the Commissioner that, on or after the 1st January, 2004,—

(a)that person is carrying on any trade; or

(b)that person intends to carry on any trade from a specified date;

may apply to the Commissioner in the prescribed form for registration under this Act and provide the Commissioner with such further particulars as the Commissioner may require for the purpose of registering that person.

(4)Where any person has—

(a)applied for registration in accordance with subsection (2) or (3) and the Commissioner is satisfied that that person is eligible to be registered in terms of this Act, that person shall be a registered operator for the purposes of this Act with effect from such date as the Commissioner may determine; or

(b)not applied for registration in terms of subsection (2) and the Commissioner is satisfied that that person is liable to be registered in terms of this Act, that person shall be a registered operator for the purposes of this Act with effect from the date on which that person first became liable to be registered in terms of this Act:Provided that the Commissioner may, having regard to the circumstances of the case, determine that person to be a registered operator from such later date as the Commissioner may consider equitable.

(5)Notwithstanding anything to the contrary in this Act, where any trade is carried on by any association not for gain in branches or divisions, or separate trades are carried on by that association, that association may apply in writing to the Commissioner for any such branch, division or separate trade to be deemed to be a separate person for the purposes of this section, and if every such branch, division or separate trade maintains an independent system of accounting and can be separately identified by reference to the nature of the activities carried on or the location of that branch, division or separate trade, every such branch, division or separate trade shall be deemed to be a separate person, and not a part of the association, and, where any such branch, division or separate trade is deemed to be a separate person under this subsection, any trade carried on by that branch or division or any separate trade carried on by the association shall, to that extent, be deemed not to be carried on by the association concerned.

(6)The provisions of this Act relating to the determination of the value of any supply of goods or services, whether such supply is made before or on or after the 1st January, 2004,, shall apply for the purposes of this section, but no regard shall be had to any tax charged in respect of any such supply:Provided that any supply of services contemplated in terms of paragraph (n) of subsection (2) of section ten shall for the purposes of this section be deemed not to be a

Value Added Tax Act

Chapter 23:12

Related documents

Value Added Tax Act

Chapter 23:12

Part I – Preliminary

1. Short title and date of commencement

2. Interpretation

3. Determination of “open market value”

Part II – Administration

4. Act to be administered by Commissioner

5. Delegation of functions by Commissioner

Part III – Value added tax

6. Value added tax

7. Certain supplies of goods or services deemed to be made or not made

8. Time of supply

9. Value of supply of goods or services

10. Zero rating

11. Exempt supplies

12. Collection of tax on importation of goods, determination of value thereof and exemptions from tax

12A. Deferment of collection of tax on capital goods

12B. Collection of tax on exportation of unbeneficiated lithium, determination of value thereof

12C. Collection of tax on exportation of unbeneficiated hides, determination of value thereof

12D. Collection of tax on exportation of unbeneficiated platinum, determination of value thereof

12E. Collection of tax on exportation of uncut and cut dimensional stone, determination of value thereof

13. Collection of value-added tax on imported services, determination of value thereof and exemptions from tax

14. Accounting basis

15. Calculation of tax payable

16. Permissible deductions in respect of input tax

17. Adjustments

18. Adjustments in consequence of acquisition of going concern wholly or partly for purposes other than making taxable supplies

19. Goods or services acquired before incorporation

20. Tax invoices

21. Credit and debit notes

22. Irrecoverable debts

Part IV – Registration

23. Registration of persons making supplies in the course of trades