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
- 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.
- 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.
