Did you know that not all supplies of goods and services to safari operators and professional hunters are subject to Value Added Tax (VAT) at the rate of 0%?
In addition, supplies to foreign hunters can either be standard rated or zero rated depending on the nature of the supply of the goods or services.
Supplies to foreign hunters
Accommodation – Accommodation services offered by registered operators to foreign hunters are provided during their stay in Zimbabwe.
The supply of the service is, therefore, subject to VAT at the standard rate of 15%.
Hunting services – All hunters who visit to hunt in Zimbabwe receive the service in Zimbabwe, the supply of the service is, therefore, subject to VAT at the standard rate of 15%.
Treatment of supply of goods to foreign hunters
Trophy fee / Supply of the hunted animal –
This entails that supply of trophies or hunted animals by the hunting safari is taxed at the standard rate of 15%.
However, the supply may be zero-rated in the case of direct exports as explained below.
– Direct exports – The goods are supplied to the foreign hunter in terms of a sale or an instalment credit agreement and consigned or delivered by the safari operator to the foreign hunter at an address in an export country and the relevant documentary requirements are met.
Otherwise, where there is no direct export, zero rating may not be possible.
The supply will be taxed at the standard rate of 15%.
VAT treatment of trophy preparation supplies to foreign hunters
– The supply of dip and pack, and taxidermy services is standard rated since this service is supplied in Zimbabwe.
– However, it may be zero-rated under Section 10 (2) (l) (ii) (A) only if the trophy is exported to the foreign hunter after the supply of the services, provided the supplier obtains and retains the required documentary proof as provided for in Section 10 (3) of the Value Added Tax Act.
– If the foreign hunter collects and subsequently removes the trophy from Zimbabwe, the trophy is not exported to the foreign hunter and the dip and pack, and taxidermy services are therefore subject to VAT at the standard rate of 15%.
Income Tax
Income earned from sale and supply of services to foreign hunters whether in the form of exports or otherwise is subject to Income Tax in terms of the Income Tax Act.
Disclaimer
This article was compiled by the Zimbabwe Revenue Authority for information purposes only. Zimra shall not accept responsibility for loss or damage arising from use of material in this article and no liability will attach to the Zimbabwe Revenue Authority.
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