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HMRC internal manual

Double Taxation Relief Manual

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HM Revenue & Customs
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DT: Zimbabwe: double taxation agreement, Article 23: Elimination of double taxation

(1) Subject to the provisions of the law of the United Kingdom regarding the allowance as a credit against United Kingdom tax of tax payable in a territory outside the United Kingdom (which shall not affect the general principle hereof):

(a) Zimbabwean tax payable under the laws of Zimbabwe and in accordance with this Convention, whether directly or by deduction on profits, income or chargeable gains from sources within Zimbabwe (excluding in the case of a dividend, tax payable in respect of the profits out of which the dividend is paid) shall be allowed as a credit against any United Kingdom tax computed by reference to the same profits, income or chargeable gains by reference to which the Zimbabwean tax is computed.

(b) In the case of a dividend paid by a company which is a resident of Zimbabwe to a company which is a resident of the United Kingdom and which controls directly or indirectly at least 10 per cent of the voting power in the company paying the dividend, the credit shall take into account (in addition to any Zimbabwean tax for which credit may be allowed under the provisions of sub-paragraph (a) of this paragraph) the Zimbabwean tax payable by the company in respect of the profits out of which such dividend is paid.

(2) Subject to the provisions of the law of Zimbabwe regarding the allowance as a credit against Zimbabwean tax of tax payable in a territory outside Zimbabwe (which shall not affect the general principle hereof):

(a) United Kingdom tax payable, whether directly or by deduction, in respect of taxable income or chargeable gains from sources within the United Kingdom shall be allowed as a credit against any Zimbabwean tax computed by reference to the same taxable income or chargeable gains by reference to which the United Kingdom tax is computed.

(b) In the case of a dividend paid by a company which is a resident of the United Kingdom to a company which is a resident of Zimbabwe and which controls directly or indirectly at least 10 per cent of the voting power in the company paying the dividend, the credit shall take into account (in addition to any United Kingdom tax for which credit may be allowed under the provisions of sub-paragraph (a) of this paragraph) the United Kingdom tax payable by the company in respect of the profits out of which such dividend is paid.

(3) For the purposes of paragraphs (1) and (2) of this Article profits, income and capital gains owned by a resident of a Contracting State which may be taxed in the other Contracting State in accordance with this Convention shall be deemed to arise from sources in that other Contracting State.