The Zimbabwe Revenue Authority (ZIMRA) issued Public Notice 05 of 2026 on 19 January 2026 to provide the public with a comprehensive explanation of the Digital Services Tax (VAT) framework. This notice follows the amendment of section 13A of the Value Added Tax Act [Chapter 23:12] with effect from 1 January 2026, which introduced a new withholding mechanism for VAT on digital services supplied by non-resident entities to consumers in Zimbabwe.
Background and Legislative Change
Prior to 1 January 2026, section 13A of the VAT Act required non-resident suppliers to register for VAT in Zimbabwe and to charge and account for VAT on two categories of service supplied into Zimbabwe: radio and television services supplied from outside Zimbabwe to a Zimbabwean address, and electronic services supplied by an e-commerce operator based outside Zimbabwe to a person resident in Zimbabwe. These services were treated as imported services deemed to be supplied in Zimbabwe by the non-resident supplier.
With effect from 1 January 2026, the amended section 13A retains the same scope of electronic services but introduces a fundamentally different collection mechanism: a Digital Services Withholding Tax. Under this mechanism, financial intermediaries — rather than the non-resident supplier alone — are required to withhold the tax when processing payments from Zimbabwean consumers to foreign suppliers for digital services. This shift is designed to enhance collection efficiency and reduce the compliance burden on individual non-resident suppliers while ensuring that VAT is collected at the payment processing stage.
Digital Services Tax does not apply to the buying and selling of physical goods. Physical goods imported into Zimbabwe remain subject to VAT on imported goods under section 6(1)(b) of the VAT Act, and VAT and customs duty continue to be assessed at the port of entry in the usual manner.
How E-Commerce Services Are Taxed for VAT
Electronic commerce refers to transactions in which the selling, purchasing, delivery, or mediation of goods or services is conducted through computerised systems and electronic networks such as the internet. For VAT purposes, Zimbabwe draws a distinction between imported services supplied electronically and those supplied through other means:
- Imported services not supplied electronically — where a service is imported but not delivered electronically, section 13(1) of the VAT Act applies. The recipient of the service in Zimbabwe must self-account for VAT and remit it directly to ZIMRA. The recipient is therefore the person responsible for ensuring the tax is paid.
- Imported services supplied electronically — where a service is supplied electronically, section 13A applies. The foreign supplier is deemed to have made a supply in Zimbabwe and is liable to register and account for VAT. To supplement this, financial institutions (intermediaries) are required to withhold the tax at the point of payment processing. Where payment is made outside Zimbabwe through a foreign payment platform, the non-resident supplier remains fully responsible for accounting for the VAT directly.
Examples of Electronic Services
Electronic services covered by the Digital Services Tax framework are those that are supplied or delivered through electronic or telecommunications networks, are automated or platform-mediated in nature, and can be provided without the physical presence of the supplier in Zimbabwe. The notice provides the following non-exhaustive list of qualifying services:
- Online subscriptions and digital platform access
- Streaming, cloud computing and hosting services
- Online advertising and digital marketplace commissions
- App-based, platform-mediated and technology-enabled services
- Downloadable digital content (apps, e-books, films)
- Subscription-based electronic media (news, magazines, journals)
- Over-the-top (OTT) services (films, music, podcasts)
- Software programmes, drivers, firewalls and filters
- Electronic data management, cloud storage and file-sharing
- Music, games and other digital entertainment
- Search engine and automated helpdesk services
- Tickets supplied electronically for live events
- Digital content for listening, viewing or playing on any digital media
- Platform-based transport hailing services
- Services supplied by Artificial Intelligence platforms
Physical goods supplied in electronic format — such as e-books, digital newspapers, and digital films — are classified as electronic services for the purposes of this framework.
Charging of VAT by Foreign Suppliers
Non-resident suppliers of digital services are required to register for VAT in Zimbabwe under section 13A(2) read with section 23 of the VAT Act where their turnover from electronic services supplied to Zimbabwean consumers meets or is expected to meet the registration threshold. Prices charged by registered non-resident suppliers must be VAT-inclusive.
All non-resident suppliers who were previously registered for VAT under the earlier version of section 13A remain registered — no re-registration is required. When submitting VAT returns, registered non-resident suppliers claim as a credit any Digital Services Withholding Tax that has been withheld in Zimbabwe by intermediaries, and pay only the balance of VAT due. ZIMRA will reconcile VAT returns submitted by non-resident suppliers against the amounts withheld by intermediaries and advise suppliers of any discrepancy.
How Intermediaries Collect the Tax
Intermediaries withhold Digital Services Tax at the time of processing a foreign payment. The applicable withholding rate depends on whether the foreign supplier is registered for VAT in Zimbabwe:
- 15.5% of the payment amount — where the foreign supplier is not registered for VAT in Zimbabwe.
- Tax fraction of 3/23 — where the foreign supplier is registered for VAT in Zimbabwe. The tax fraction of 3/23 is equivalent to the VAT component embedded in a VAT-inclusive price at a 15.5% rate (i.e. 15.5 / 115.5 = 3/23).
Payments made to local suppliers of electronic services do not attract Digital Services Tax. The withholding mechanism applies exclusively to payments made to foreign (non-resident) suppliers.
Who Are Intermediaries in Zimbabwe
Intermediaries are financial institutions as defined in the VAT Act and include all entities that process payments between Zimbabwean consumers and foreign suppliers. The following categories of institution qualify as intermediaries for Digital Services Tax purposes:
- Banking institutions
- Building societies
- The Reserve Bank of Zimbabwe
- POSB
- Infrastructure Development Bank of Zimbabwe
- Agricultural Finance successor institutions
- Licensed postal service providers
- Mobile banking service providers
- Mobile money transfer platform operators
- Registered money transfer services
- Microfinance institutions
Obligations of Intermediaries
Intermediaries bear the following obligations under the Digital Services Tax framework:
- Withhold and remit Digital Services Tax to the Commissioner-General by the prescribed deadlines.
- Issue a certificate of withholding to the consumer for each transaction withheld. The certificate must show the date of transaction, name of the non-resident supplier, name of the payer, amount paid to the foreign supplier, amount of tax withheld, and the payment reference number.
- Maintain records of all payments made to foreign suppliers for the prescribed record retention period.
- Cooperate with ZIMRA for verification and audit purposes.
Services Subject to Digital Services Tax
Digital Services Tax applies where all three of the following conditions are met: (i) the services are supplied electronically; (ii) the supplier is non-resident; and (iii) the services are consumed or used in Zimbabwe. The tax does not apply to imported physical goods, services rendered physically that are taxed under section 13 of the VAT Act, or services consumed outside Zimbabwe.
Where electronic services are consumed in Zimbabwe but payment is made outside Zimbabwe through a foreign payment platform, the non-resident supplier is required to charge and account for VAT directly to ZIMRA — provided they are registered for VAT in Zimbabwe. Where the supplier is not registered, the withholding obligation cannot be fulfilled by a foreign intermediary, and ZIMRA may pursue the non-resident supplier directly for the outstanding VAT.
Zero-Rated and Exempt Services
Where electronic services supplied by a non-resident supplier would ordinarily be zero-rated or exempt if supplied within Zimbabwe by a local supplier, the same VAT treatment applies to the electronic supply. The following categories of service are specifically identified in the notice as falling into this category:
- Educational services
- Medical services
- Financial services as defined in section 2 of the VAT Act
No Digital Services Tax is withheld on payments for zero-rated or exempt digital services. Intermediaries must therefore have systems in place to identify these transactions and apply the correct treatment at the point of payment processing.
Due Dates for Digital Services Tax
The following return submission and payment deadlines apply to each category of person with obligations under the Digital Services Tax framework:
| Obligated Party | Return Due | Payment Due |
|---|---|---|
| Intermediaries | 10th of the following month | 15th of the following month |
| Non-Resident Suppliers | 10th of the following month | 15th of the following month |
Registration by Non-Resident Suppliers
Non-resident suppliers must register for VAT in Zimbabwe where their turnover from electronic services supplied to Zimbabwean consumers exceeds or is expected to exceed USD 25,000 in any twelve-month period. Registration is completed through the TaRMS platform using the simplified e-commerce module, which has been configured to accommodate non-resident registrations without requiring a physical presence or a local agent as a condition of registration.
Fiscal Tax Invoices and Currency of Payment
Non-resident suppliers registered for VAT in Zimbabwe are required to issue fiscalised tax invoices and must be onboarded onto the Fiscalisation Data Management System (FDMS). The fiscalisation requirement ensures that supplies made by registered non-resident suppliers can be cross-referenced against input tax claims made by local VAT-registered businesses that purchase digital services from those suppliers.
Digital Services Tax is payable in United States Dollars (USD). All withholding amounts remitted by intermediaries and all payments by non-resident suppliers must be made in USD.