Taxpayer, a company did a job in Zimbabwe for which they invoiced the Zimbabwean company, then they got issued with a withholding tax certificate and the balance paid. According to Section 80 of the Zimbabwean income tax Act they are complied to do I woul
Important:
This answer is based on tax law for the tax year ending 28 February 2020.
Answer:
It may in fact make a difference (two completely different treaties). The following will however be the same:
It is general practice that it is the country of residence of the taxpayer that must grant relief for the tax paid in the other country. This the RSA does in section 6quat. It doesn’t involve the refund of the foreign tax paid. The credit, or foreign tax rebate, merely reduces the RSA tax liability. It is claimed on the ITR14 and the taxpayer gets it on assessment.
We accepted that the taxpayer is a company, but that may also not make a difference. The double tax will arise because both countries can tax. This is in terms of Article 13, technical fees. It reads as follows:
1. Technical fees arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
2. However, such technical fees may also be taxed in the Contracting State in which they arise, and according to the laws of that State, but if the beneficial owner of the technical fees is a resident of the other Contracting State, the tax so charged shall not exceed 5 percent of the gross amount of the technical fees.
3. The term “technical fees” as used in this Article means payments of any kind to any person, other than an employee of the person making the payments, in consideration for any service of an administrative, technical, managerial or consultancy nature.
Article 22 provides for the relief from the double tax, but it is as we explained.