Digital Service Tax and Digital Services Withholding Tax in Zimbabwe

Digital Service Tax and Digital Services Withholding Tax in Zimbabwe

Every person who provides services as a satellite broadcasting service or provides services as an electronic commerce operator which receives revenue from the provision or delivery of such services to persons resident in Zimbabwe subject to some exclusions, shall pay tax on such revenues charged and levied at the rate specified in section 14(2)(k) of the Charging Act currently 5%.

DST Registration 

• A company is required to register for DST in Zimbabwe once it starts generating revenue from a source within Zimbabwe derived from digital services.
• From that moment, a company will be liable to comply with all DST obligations, including registration, filing of returns, and payment of the applicable tax to ZIMRA.

Appointment of a Representative (Local Public Officer).

• The company is also required to appoint a resident representative who will act as the public officer and assume responsibility for the administration and management of the company’s tax affairs.

DST Rate 

• The DST is calculated at a rate of 5% on the total gross revenue received from the provision of digital services in Zimbabwe.
• This means that the tax is applied to the full amount earned from such services, without any deductions for expenses or costs incurred in generating that income.

Failure to register for DST in time 

• If a company’s is required to register for DST and the company has not registered, ZIMRA will register the company retrospectively.
• The company will also be liable for penalties and interest.

Returns Submission 

• Returns are required to be submitted quarterly throughout the year as follows in terms of Statutory Instrument 81 of 2025:
• 1st Quarter: 5th April
• 2nd Quarter: 5th July
• 3rd Quarter: 5th October

• 4th Quarter: 5th January 

   

• Failure to submit a return on time attracts a civil penalty of US$30 per day, which may accrue for up to 91 days.

Remittance of DST

• DST should be remitted on the following dates:
• 1st Quarter: 10th April
• 2nd Quarter: 10th July
• 3rd Quarter: 10th October
• 4th Quarter: 10th January
• Late payments are subject to a 100% penalty on the tax due, in addition to 10% interest

Digital Services Withholding Tax 

• Effective 1 January 2026, section 13A of the VAT Act was amended. Previously, non-resident suppliers of radio, television, and electronic services to Zimbabwe were deemed to supply imported services and were required to register for VAT and account for it if thresholds were met.
• With effect from 1 January 2026, amended section 13A retains the scope of electronic services but introduces Digital Services Withholding Tax, requiring intermediaries to withhold tax on payments to foreign digital suppliers. The tax excludes physical goods, which remain subject to VAT and customs duty at importation under section 6(1)(b).

Imported services supplied electronically

• Where services are supplied electronically, section 13A deems the foreign supplier to have supplied in Zimbabwe, requiring VAT registration and accounting.
• Financial intermediaries must withhold tax on payments to foreign suppliers. If payments occur via foreign platforms, the non-resident supplier remains responsible.
• Electronic services include digital streaming, online advertising, marketplaces, and downloadable content, supplied via networks without the supplier’s physical presence.

Due date for Digital Services Tax

• Intermediaries
• Returns due by the 10th of the following month. 

• Payment due by the 15th of the following month.

   

• Non-resident suppliers
• VAT returns due by the 10th of the following month.
• Payment due by the 15th of the same month.

How Baker Tilly can assist 

• Baker Tilly can assist operators subject to DST and VAT with registration process.
• Baker Tilly can serve as the public officer or local representative of the company.
• Baker Tilly can handle tax-related responsibilities for the company, including DST and VAT calculations, submission of returns, and representation during tax audits.

By Gift Freddy

Tax Consultant at Baker Tilly.

Reference

• Section 12A of the Income Tax Act
• Section 14 (2) (k) of the Finance Act
• Statutory Instrument 81 of 2025 - Finance (Due Dates for Submission of Returns and References to the Zimbabwe Dollar)
• Section 13A of the Value Added Tax Act
• Public Notice 5 of 2026
• Finance Act No.7 of 2025