Introduction

Zimbabwe’s corporate income tax system plays a significant role in shaping the country’s investment climate. Whether you’re a local entrepreneur or a foreign investor planning to establish a business in Zimbabwe, understanding the corporate tax structure is essential for legal compliance and efficient financial planning.

This guide provides an in-depth look at Zimbabwe’s corporate tax regime in 2025, including applicable rates, exemptions, filing procedures, penalties, and incentives for investors. We also explore how corporate taxation compares regionally and what changes are shaping Zimbabwe’s tax environment.

What is Corporate Income Tax?

Corporate income tax is a direct tax levied on the net profits of companies and other entities operating for profit. In Zimbabwe, the tax is regulated by the Income Tax Act [Chapter 23:06], which is administered by the Zimbabwe Revenue Authority (ZIMRA).

All resident and certain non-resident companies conducting business in Zimbabwe are required to pay corporate income tax on profits derived from or deemed to be from sources within Zimbabwe.

Who Pays Corporate Income Tax in Zimbabwe?

1. Resident Companies

Resident companies are taxed on income earned from both local and foreign sources. A company is considered resident if it is incorporated in Zimbabwe or if its management and control are exercised in Zimbabwe.

2. Non-Resident Companies

Non-resident companies are taxed only on income sourced within Zimbabwe. If they operate through a branch or have a permanent establishment (PE) in the country, they are liable for corporate income tax on the profits attributable to that PE.

Corporate Income Tax Rates in Zimbabwe (2025)

As of 2025, the general corporate income tax rate in Zimbabwe remains as follows:

Type of Entity

Tax Rate

Standard Companies

24%

Mining Companies (excluding gold)

24%

Gold Mining Companies

15%

Special Economic Zones (SEZs)

0% for first 5 years, 15% thereafter

Manufacturing Exporters

10% (under certain incentives)

In addition to corporate tax, a 3% AIDS Levy is imposed on the assessed tax liability, effectively increasing the burden slightly.

How Corporate Income Tax is Calculated

Corporate income tax is calculated based on taxable income, which is the difference between a company’s gross income and allowable deductions.

Gross income includes:

  • Revenue from sales of goods or services
  • Investment income
  • Royalties
  • Capital gains (subject to separate taxation in some cases)

Allowable deductions include:

  • Business expenses wholly and exclusively incurred in earning income
  • Depreciation (capital allowances)
  • Bad debts
  • Donations (within statutory limits)
  • Loss carry-forwards (up to 6 years)

Filing and Payment Requirements

1. Tax Year

Zimbabwe operates on a fiscal year running from January 1 to December 31.

2. Provisional Tax

Companies must make quarterly provisional tax payments based on estimated annual income. These are due by:

  • 25 March
  • 25 June
  • 25 September
  • 20 December

3. Annual Return Filing

Companies are required to file their Annual Income Tax Return (ITF12C) by June 30 of the following year. This must include audited financial statements where applicable.

4. Payment of Final Tax

After the annual assessment, any balance of tax due must be paid upon filing. Overpayments may be refunded or carried forward.

Penalties for Non-Compliance

Failure to comply with corporate income tax obligations in Zimbabwe attracts serious penalties:

  • Late Filing Penalty: USD 30 per day up to a maximum of 180 days
  • Late Payment Penalty: 10% of unpaid tax
  • Interest on Overdue Tax: 5% per annum above the prevailing commercial bank lending rate
  • Criminal Prosecution: In cases of willful tax evasion

Corporate Tax Incentives in Zimbabwe

Zimbabwe offers a variety of tax incentives to attract investment and promote economic development.

1. Special Economic Zones (SEZs)

Companies operating in SEZs benefit from:

  • 0% tax for the first five years
  • 15% thereafter
  • Exemption from capital gains tax on asset disposals
  • Reduced customs duties on capital goods

2. Export Incentives

Manufacturers exporting at least 30% of their output may qualify for a reduced income tax rate of 10%.

3. Build-Operate-Transfer (BOT) Projects

BOT infrastructure developers may enjoy tax holidays of up to 5 years.

4. Capital Allowances

Zimbabwe offers generous capital depreciation allowances:

  • 25% for industrial buildings
  • 50% (initial allowance) + 25% (annual wear and tear) for manufacturing equipment

Corporate Withholding Taxes in Zimbabwe

Certain income streams are subject to withholding tax (WHT), even if earned by a company:

Nature of Payment

WHT Rate

Dividends (residents)

10%

Dividends (non-residents)

15%

Royalties to non-residents

15%

Management Fees

15% (non-residents)

Interest on local debt

10%

These WHT rates may be reduced under Double Taxation Agreements (DTAs) Zimbabwe has signed with several countries, including South Africa, China, and Germany.

Recent Developments in Corporate Tax Policy

Zimbabwe’s government continues to refine tax laws in line with global trends and the national development agenda.

Key developments include:

  • Increased digital compliance: Companies are now expected to file and pay taxes electronically via the ZIMRA e-services platform.
  • Focus on Base Erosion and Profit Shifting (BEPS): Zimbabwe has committed to adopting measures aligned with the OECD’s BEPS framework.
  • Carbon Tax and ESG-linked levies: New environment-linked taxes are under review, particularly for mining and industrial sectors.

Comparison with Other African Countries

Country

Corporate Tax Rate (2025)

Zimbabwe

24%

South Africa

27%

Zambia

30%

Botswana

22%

Kenya

30%

Zimbabwe’s corporate tax rate is competitive regionally, especially when incentives are factored in. However, effective tax planning and expert advice are crucial to navigate complex rules.

Steps to Stay Compliant

  1. Register with ZIMRA: Every company must obtain a Business Partner Number (BPN) upon incorporation.
  2. Maintain Proper Records: Ensure all financial statements, invoices, and receipts are accurately recorded and stored.
  3. Hire a Qualified Tax Consultant: Zimbabwe’s tax laws are dynamic. Consulting a registered tax practitioner helps avoid costly mistakes.
  4. Use the ZIMRA e-Services Platform: Leverage digital tools for timely submissions and monitoring.
  5. Stay Updated on Tax Law Changes: Subscribe to ZIMRA newsletters or professional tax services to stay informed.

Conclusion

Corporate income tax in Zimbabwe is structured to balance government revenue needs with incentives to attract investment. Companies that stay informed, properly plan their taxes, and fulfill compliance requirements will avoid penalties and benefit from available tax breaks. For more detailed tax resources and current forms, visit the Zimbabwe Revenue Authority (ZIMRA) official website