The Sunday Mail
Government has relaxed the taxation regime for individuals and companies doing business between Zimbabwe and China in a bid to ensure fruition of economic deals signed by the two countries over the past two years.
The provisions gazetted last Friday under Statutory Instrument 114 of 2016 will improve the ease and cost of doing business for expatriate workers of both countries.
The provision seeks to protect investments by the two countries as investors, in any of the two States will only be taxed in their country of operation.
According to the Statutory Instrument, the: “Agreement shall apply to taxes on income imposed on behalf of a Contracting State or of its local authorities, irrespective of the manner in which they are levied.”
“Taxes imposed on total income, or on elements of income, including taxes on gains from the alienation of movable or immovable property, as well as taxes on capital appreciation shall be regarded as tax”.
The regulations follow an agreement concluded between Zimbabwe and China early this year to relieve double taxation of income that is earned in one jurisdiction by a resident of the other.
The law also clarifies, standardises and guarantees fiscal treatment of tax payers who engage in business in the two countries to protect taxpayers against double taxation.
According to the SI: “Dividends paid by a company which is resident of a Contracting State may be taxed in that other side. The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein.
“If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State, but only so much of them as is attributable to that permanent establishment.”
Chinese businesses are now one of the biggest investors in the country since Government adopted the Look East Policy following the imposition of illegal sanction against the country by West.
