Zimbabwe Clarifies Application of Thin Capitalization Rules

As part of the 2019 Mid-Year Budget Review, Zimbabwe's Ministry of Finance has clarified the application of the country's thin capitalization rules. The rules generally provide that the deduction of interest expense is restricted where a 3:1 debt-equity ratio is exceeded. The clarification provides that the restriction does not apply in relation to interest expense on debt with domestic financial institutions that are not associated with the taxpayer, unless there was collusion for the avoida…