SI 18 of 2025 Republished With Corrections

This instrument republishes Statutory Instrument 18 of 2025 with corrections. It is Proclamation 2 of 2025, by which the President notifies, under section 91 of the Income Tax Act, the terms of a double taxation agreement concluded with the Government of the Republic of Belarus on 31 January 2023. The proclamation was given on 3 February 2025 and gazetted on 14 March 2025.

The rate caps are what most readers will want. Dividends paid to a beneficial owner in the other state are capped at 5% where that owner — other than a partnership — holds at least 20% of the capital of the paying company, and 10% in all other cases. Interest is capped at 5%, and is exempt altogether where the beneficial owner is the other state's government or a local authority, its national or central bank, the Bank of Development of the Republic of Belarus, or a financial institution wholly owned by the other government as agreed between them. Royalties are capped at 5% and fees for technical services at 2.5%.

The agreement covers Zimbabwean income tax, non-resident shareholders' tax, non-residents' tax on fees, non-residents' tax on royalties, capital gains tax and residents' tax on interest; on the Belarusian side, the tax on income, the tax on profits, the income tax on individuals and the tax on immovable property. The competent authorities are the Commissioner-General of ZIMRA and the Ministry of Taxes and Duties of Belarus.

A permanent establishment arises from a building site, construction, assembly or installation project or related supervisory activity lasting more than nine months, or from furnishing services including consultancy through employees for more than 183 days in any twelve-month period. Installations or structures used to explore natural resources for another enterprise count once they run for at least 183 days.

On capital gains, shares in a company deriving more than half its asset value from immovable property in the other state may be taxed there — with a carve-out for shares quoted on the Zimbabwe Stock Exchange, the JSC Belarusian Currency and Stock Exchange, or other exchanges the competent authorities agree. Gains on ships and aircraft in international traffic are taxable only in the operator's state.

A principal purpose test applies: a benefit is refused where obtaining it was one of the principal purposes of an arrangement, unless granting it would accord with the object and purpose of the relevant provisions.

Two things mean nobody should rely on these rates yet. The agreement enters into force only on the date the later of the two diplomatic notifications is received, and takes effect for withholding taxes on income derived from 1 January of the following calendar year, and for other taxes from taxable years beginning on or after that date — and the proclamation does not state that either notification has been given. The signature block in the published schedule is also blank, printing "Done at ___ on the ___ day of ___ 20__" with no place, date or signatures. The Russian and English texts are equally authentic, with English prevailing on any divergence. Either state may terminate on at least six months' notice before the end of a calendar year, once five years have run from entry into force.