What is Capital Gains Tax?

Capital Gains Tax (CGT) is levied on the capital gain arising from the disposal of a specified asset in terms of  section 6 of the Capital Gains Tax Act [Chapter 23:01].

What is a specified Asset?

According to section 2 of the Capital Gains Tax Act [Chapter 23:01], a specified asset means:

(a) immovable property; or

(b) any marketable security; or

(c) any right or title to property whether tangible or intangible that is registered or required to be registered in terms of the -

(i) Mines and Minerals Act [Chapter 21:05]; or

(ii) Patents Act [Chapter 26:03]; or

(iii) Trade Marks Act [Chapter 26:04]; or

(iv)  Industrial Designs Act [Chapter 26:02]; or

(v) Copyright and Neighbouring Rights [Chapter 26:05]; or

(vi) Brands Act [Chapter 19:05]; or

(vii) Geographical Indications Act [Chapter 26:06]; or

(viii)  Integrated Circuit Layout-Designs Act [Chapter 26:07] Act (No. 18 of 2001).

 

Rates of Capital Gains Tax

The table below summarises the CGT rates as provided for in section 38 of the Finance Act (Chapter 23:04):

Specified Assets

Tax Rate in ZWL

Tax Rate in USD

Specified Assets acquired before 22nd February 2019 and sold from 22nd February 2019.

ZWL0.05 for each dollar of gross capital amount

USD0.05 for each dollar of gross capital amount

Specified Assets acquired from 22nd February 2019 and sold from that date and after.

ZWL0.20 for each dollar of the capital gain

USD0.20 for each dollar of the capital gain

 

Calculation of Capital Gains Tax

  • According to section 39 (10) of the Finance Act, the gain is accounted for in the currency realised from the sale and all sales are deemed to have been made in US$ unless the seller proves otherwise by documentary proof.
  • According to section 39A 9(a) of the Finance Act (Chapter 23:04), where the capital gain is received in Zimbabwe dollar the capital gains tax shall be payable in ZWL.In instances where the capital gain is received in whole or in part in foreign currency the tax due shall be determined proportionate to the capital gain and shall be paid in the respective currency of the gains.

My Taxes, My Duties: Building my Zimbabwe!!

 

Disclaimer

This article was compiled by the Zimbabwe Revenue Authority for information purposes only. ZIMRA shall not accept responsibility for loss or damage arising from use of material in this article and no liability will attach to the Zimbabwe Revenue Authority. 

Categories