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Zimbabwe: Transfer pricing rules, overview

Zimbabwe: Transfer pricing rules, overview

The transfer pricing rules in Zimbabwe apply for taxpayers that operate in more than one tax jurisdiction and that have cross-border transactions with related parties or entities, as well as for taxpayers that are part of a domestic group of companies and that have intercompany transactions with local (domestic) related parties.


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If the transfer pricing rules apply, the taxpayer must:

  • Have contemporaneous documentation verifying that the subject transactions are consistent with the arm’s length principle (documentation is considered to be contemporaneous when it is updated and in place as of the date of the tax return’s statutory filing date).
  • Turn over, when requested by the tax authorities, information about the related-party transactions (documentation must be provided within seven days of a written request, and must be submitted in the English language).

Failures to maintain contemporaneous documentation or to turn over information to the tax authorities will result in penalty assessments.

The transfer pricing rules in Zimbabwe also provide:

  • Thin capitalisation rules (interest expenses are disallowed on the portion that causes the debt-to-equity ratio to exceed 3:1 (three to one)).
  • General administration and management fees between related entities will be denied for the portion that exceeds 1% of total allowable deductions.
  • The amounts of disallowed interest expenses and administration and management fees will be subject to tax at a rate of 15% (that is, the rate of the shareholders’ tax) in addition to the standard income tax rate of 25.75%.

Read a May 2019 report [PDF 1.75 MB] prepared by the KPMG member firm in Zimbabwe

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