At the moment of signing the Convention for the avoidance of double taxation and the
prevention of fiscal evasion with respect to taxes on income and capital gains, this
day concluded between the Kingdom of the Netherlands and the Republic of Zimbabwe,
the undersigned have agreed that the following provisions shall form an integral part
of this Convention.
(1) Ad Article 7
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a) In respect of paragraphs 1 and 2 of Article 7, where an enterprise of one of the States
sells goods or merchandise or carries on business in the other State through a permanent
establishment situated therein, the profits of that permanent establishment shall
not be determined on the basis of the total amount received by the enterprise, but
shall be determined only on the basis of the remuneration which is attributable to
the actual activity of the permanent establishment for such sales or business.
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b) In the case of contracts for the survey, supply, installation or construction of industrial,
commercial or scientific equipment or premises, or of public works, when the enterprise
has a permanent establishment, the profits of such permanent establishment shall not
be determined on the basis of the total amount of the contract, but shall be determined
only on the basis of that part of the contract which is effectively carried out by
the permanent establishment in the State where the permanent establishment is situated.
The profits related to that part of the contract which is carried out by the head
office of the enterprise shall be taxable only in the State of which the enterprise
is a resident.
(2) Ad Articles 10, 11 and 12
Where tax has been levied at source in excess of the amount of tax chargeable under
the provisions of Articles 10, 11 or 12, applications for the refund of the excess
amount of tax have to be lodged with the competent authority of the State having levied
the tax, within a period of three years after the tax has been levied.
(3) Ad Article 13
When applying the provisions of Article 13 of this Convention in Zimbabwe, the following
shall be taken into account. Where the ownership of any specified asset is transferred
from a company, in the course of or in furtherance of a scheme of reconstruction of
a group of companies or a merger or other business operation which, in the opinion
of the Commissioner of Taxes, is of a similar nature, to another company under the
same control, the transferor and the transferee may elect that, notwithstanding the
terms of any agreement of sale, the selling price of the asset shall in relation to
the transferor be deemed for the purposes of this Convention to be an amount equal
to the sum of the deductions allowable to such transferor in respect of such asset
in terms of paragraphs a), b), c) and d) of subsection (2) of section eleven of the
Capital Gains Tax Act, 1981, of Zimbabwe, as in force at the date of signature of
this Convention at the date of transfer:
Provided that if after the transfer such asset is sold, other than to a company under
the same control, the capital gain in the hands of the seller shall be calculated
as if the asset had at all times remained in the ownership of the first transferor
in respect of whom an election was made in terms of this section.