What Is Withholding Tax?
Withholding tax (WHT) is a tax deducted at source by the person making a payment. Instead of the recipient paying tax later, the payer deducts it before payment and remits it directly to ZIMRA. This ensures tax is collected efficiently on various types of income.
Withholding Tax Rates 2026
Resident Withholding Tax Rates
| Payment Type | Rate | Notes |
|---|---|---|
| Rental income (residential & commercial) | 10% | On gross rental |
| Interest (from financial institutions) | 15% | Final tax for individuals |
| Dividends | 10% | On gross dividend |
| Fees & commissions | 10% | Where recipient has no TIN |
| Contract payments | 10% | Payments to unregistered contractors |
Non-Resident Withholding Tax Rates
| Payment Type | Rate | Notes |
|---|---|---|
| Dividends | 10% | May be reduced by DTA |
| Interest | 15% | May be reduced by DTA |
| Royalties | 15% | May be reduced by DTA |
| Fees for technical services | 15% | Management, consultancy, technical fees |
| Remittances (abroad) | Various | Depends on nature of payment |
How Withholding Tax Works
Example: Rental Income
A tenant pays $2,000/month rent to a landlord:
- WHT at 10%: $2,000 × 10% = $200
- Net payment to landlord: $2,000 − $200 = $1,800
- Tenant remits $200 to ZIMRA by the 10th of the following month
Example: Non-Resident Dividends
A Zimbabwean company declares $50,000 dividend to a non-resident shareholder:
- WHT at 10%: $50,000 × 10% = $5,000
- Net dividend paid: $50,000 − $5,000 = $45,000
- Company remits $5,000 to ZIMRA
Obligations of the Withholding Agent
- Deduct the correct withholding tax rate from the payment
- Remit the withheld tax to ZIMRA by the 10th of the following month
- File the withholding tax return on TARMS
- Issue a withholding tax certificate to the recipient
- Keep records of all withholdings for at least 6 years
Double Tax Agreements (DTAs)
Zimbabwe has double taxation agreements with several countries that may reduce withholding tax rates. Key DTA partners include:
- South Africa, Botswana, Zambia, Mozambique
- United Kingdom, Germany, France, Netherlands
- Canada, China, Malaysia, Sweden
- Mauritius, Bulgaria, Poland
To claim a reduced rate under a DTA, the non-resident must provide a certificate of tax residence from their home country tax authority.
Withholding Tax vs Final Tax
Some withholding taxes are final (no further tax due), while others are advance payments that can be credited against the final tax assessment:
- Final tax: Resident interest (15%), non-resident dividends, royalties, fees
- Advance payment: Rental WHT can be credited on the annual return if the landlord declares rental income
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