Only operators registered for Value Added Tax (VAT) may charge VAT on the supply of goods and services.

 

Compulsory registration

With effect from 1 January 2022 a trader is liable to register for VAT if the value of taxable supplies exceeds or is expected to exceed ZWL7, 800,000.00 or US$60,000.00 within a period of 12 months. In cases where the operator has reached/exceeded a turnover of ZWL7, 800,000.00 or US$60,000.00 but failed to register, the Commissioner General of the Zimbabwe Revenue Authority (ZIMRA) may compulsorily register the operator. The operator would be required to pay the VAT due, interest and penalties on the computed debt. Failure to register for VAT constitutes an offence in terms of the VAT Act (Chapter 23:12).

With effect from 1 January 2022 the following registration amounts and conditions apply to the various categories of VAT:

 DESCRPITION

Registration Threshold (ZWL$)

Compulsory Registration

 ZWL7,800,000.00 or US$60,000.00

Voluntary Registration

Subject to minimum turnover set by the Commissioner, conditions in the VAT Act

Category C Threshold

ZWL31,200,000.00 or US$240,000.00

Category D Threshold

 ZWL15,600,000.00 or US$120,000.00

Prescribed  amount when supplier not required  to provide a fiscal tax invoice

 ZWL1,300.00 or US$10.00

Prescribed amount where no refund is processed

ZWL7,800.00 or US$60.00

 Who may be excluded from registration?

The following will not be obliged to register for VAT:

  • Traders who will be solely dealing in exempt supplies;
  • Any person conducting private or recreational pursuit or hobby;
  • Any service provided by an employee to his employer or small traders whose taxable turnover is below ZWL7,800,000.00 or US$60,000.00per annum

How to register for VAT

  • Must be registered with ZIMRA having a BP Number.
  • Fully complete REV 1 FORM (download from www.zimra.co.zw).
  • Sales Schedule from the time of commencement of trade to date of submission of registration form.
  • Sales invoices from the time of commencement of trade to date showing customers name and telephone numbers OR confirmed and signed contracts.
  • Sales projections schedule for the next 12 months.
  • Current stamped bank statement.
  • Letter appointing public officer.
  • Valid lease agreement in the company name (if property is rented) or title deed (if property is owned)

 

For Individuals:

  • Stamped current bank statement;
  • Certified Copy of ID;
  • Copy of proof of residence in the form of utility bills, supported with affidavit if not in the trader’s name.

Upon registration, every registered operator will be issued a letter confirming registration, VAT number and the VAT category.

 

What are the responsibilities of a registered person?

A registered person is obliged to comply with the following requirements of the VAT Act:

  • Keep accounting records for at least six years after the tax period to which they relate.
  • Complete and submit VAT returns as per requirement.
  • Calculate and remit the VAT due to the Commissioner General of ZIMRA on or before the due date.
  • Issue fiscal tax invoices with effect from 1 January 2022, debit notes or credit notes.
  • Account for VAT if one sells or retains stock or assets.
  • Advise the Commissioner General of any changes in business details or when one ceases trade.

 

Cancellation of registration

Deregistration can be done at the Commissioner’s discretion, on voluntary application, or on cessation of trade and notice being given within 21 days of the date of such cessation of trade. In this case, a VAT 5 form should be completed and submitted to the Commissioner General of ZIMRA. If he/she is satisfied that all obligations have been met in full, he/she shall accordingly deregister the operator.