DT20955 - Zimbabwe: Technical fees

The agreement provides that technical fees (defined as `payments of any kind to any person, other than to an employee of the person making the payments, in consideration for any service of technical, managerial, or consultancy nature’) arising in Zimbabwe and paid to a resident of the United Kingdom may be taxed in both countries.

The tax chargeable in Zimbabwe is limited to 10 per cent of the gross but, if the recipient has in Zimbabwe a permanent establishment, or (in the case of independent personal services) a fixed base, with which the technical fees are effectively connected (see INTM153110 fifth subparagraph), the Zimbabwean tax chargeable on those fees will be calculated as if they were profits attributable to that permanent establishment or fixed base and taxable under Article 7 or Article 15 (Article 13(4)).

Whether the Zimbabwean tax is charged on the gross fees or in accordance with Articles 7 or 15, the United Kingdom measure of the doubly taxed income will be the net technical fees after deduction of expenses attributable to those fees ( INTM168062).