MNEs and companies with associate transactions will be required for the first time in Zimbabwe to file transfer pricing (TP) returns. Disclosure is also required when a taxpayer has transactions with tax havens i.e. low tax jurisdiction countries.
The return is to be filed at the same time with the Income Tax Return (ITF12C) on August 31, 2020, being the new submission date for 2019 income tax returns following an extension granted by the government owing to Covid-19.
The Zimbabwe Revenue Authority (Zimra) announced in March that it has received assistance from the ATAF International Taxation team in coming up with an advance version of the transfer pricing return that taxpayers are directed to file with their annual self-assessment corporate income tax return for the year ended December 31, 2019.
The return supplements the new transfer pricing reporting requirements Zimbabwe introduced in 2019.
The transfer pricing return must be completed by all taxpayers with international and/or domestic related party transactions.
The information requested in the return will assist Zimra to identify and assess potential risks to Zimbabwe’s tax base from abusive transfer pricing practices and ensure that it focuses its resources on the highest risk cases.
This will provide greater tax certainty and reduce compliance costs for complaint taxpayers in Zimbabwe (https://www.ataftax.org/zimbabwe-introduces-new-transfer-pricing-return-for-taxpayers).
Related party or associate transactions are those entered into with near relatives, between companies under the same control (affiliates or sister companies), a partner and fellow partner in a partnership, trustees with their trust or trustee and beneficiary (ie
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