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  1. What are Harmonized System Codes (HS Codes)?

HS Codes are a standardised numerical method (8-digit classification) of classifying traded products. They were developed by World Customs Organization (WCO) and designed for use in classifying goods when exporting and importing. Zimbabwe Revenue Authority (ZIMRA) has extended the use of HS Codes in classifying domestic of products and services when recording and transmitting sales transactions under Fiscalisation Data Management System (FDMS).

  1. How to use HS codes when recording sales transactions on a fiscal device

All VAT registered taxpayers/operators are expected to configure their fiscal devices to assign applicable HS codes when making a sale transaction through a fiscal device

  • For all invoice line items where VAT is charged at 0% or Exempted from VAT, a full eight (8)-digit classification HS Code must be captured when generating and/or recording a fiscal tax invoice.
  • For all invoice line items where VAT is charged at standard rate (15%), the first four digits are required or optionally a full eight (8)-digit classification HS Code may be captured when generating/recording a fiscal tax invoice.
  1. Is displaying HS codes on Fiscal Tax Invoices mandatory?

Displaying HS codes on issued fiscal tax invoice is optional and not mandatory. However, it is mandatory for any configured and interfaced fiscal device to be transmitting the recorded HS codes on issued Fiscal Tax Invoice to the Fiscalisation Data Management System (FDMS) whether displayed or not displayed on the issued/printed Fiscal Tax Invoice.

  1. How to classify the domestic supply of services and other intangible products which are not classified on the Customs Harmonized System Codes e.g. Rentals, Consultancy etc.?

While HS codes are suitable for classification of physical products under customs environment, classifying domestic supply of services or intangible products is not available on the conventional HS Code list. Taxpayer are encouraged to use the fiscalisation general classification for services and assign applicable VAT rate accordingly as indicated below:

ITEM

CLASSFICATION IN FDMS

DESCRIPTION

1

99001000

FR(l) Provision of Services at 15% VAT (Describe service e.g Accomodation)

2

99002000

FR(m) Provision of Services at 0% VAT (Describe service)

3

99003000

FR(n) Provision of Services at VAT Exempted (Describe service)

    

 

  1. What are the uses of these HS Codes in Domestic Taxes when recording sales transactions?

              HS Codes are used for the following purposes;

  • Harmonized classification of domestic supply of goods and services, thereby providing uniformity in identifying nature of transactions amongst national industries and sectors.
  • To aid verifications of taxes applicable on domestic supplies made from imported and exported products
  • Generating trade statistics for policy making and economic planning.

 

My Taxes, My Duties: Building My Zimbabwe

 

Disclaimer

This article was compiled by the Zimbabwe Revenue Authority (ZIMRA) 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.

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