Vatvalueofsupply

Once the charge has attached (Section 6 — Imposition lesson) and the supply has been timed (Section 8 — Time of Supply lesson), the final quantitative question is how much: on what amount does the 15.5% rate (in force from 1 January 2026 — Finance Act, 2025, Act No. 7 of 2025) actually bite? Section 9 of the VAT Act [Chapter 23:12] answers it for every supply, real or deemed. Its architecture is a general rule plus a long schedule of special values, each special value matched to a deeming provision elsewhere in the Act.

The general rule — Section 9(2)–(3) — values a supply at the consideration less the tax element. Consideration in money counts at the amount of the money; consideration otherwise than in money counts at its open market value (OMV — determined under the Section 3 cascade examined in the Defined Terms lesson). Two provisos refine the rule: the value of a postage stamp used to pay for postal services is excluded; and where the operator has not separately accounted for the tax portion, the tax is deemed to be the tax fraction of the consideration — extracted from the price, never added on top, the point confirmed in Triangle Ltd & Hippo Valley Estates v ZIMRA & 10 Ors 20-HMA-028, on appeal 21-SC-082. At the current rate the fraction is 15.5/115.5; an operator who failed to charge VAT has therefore not escaped it — his gross receipts simply contain it.

The anti-avoidance keystone is Section 9(4): where a supply is made for no consideration or below OMV, the parties are connected persons, and the recipient would not have been entitled to a full input tax deduction had he paid OMV, the consideration is deemed to be the OMV (R (Pvt) Ltd v ZIMRA 19-HH-792; ZS (Pvt) Ltd v ZIMRA 20-FAC-113). The third condition is the design insight: where the recipient could recover all the tax anyway, undervaluation costs the fisc nothing and the rule stands down. A proviso disapplies Section 9(4) to employment fringe benefits, which have their own value rule.

The special values then track the deemed supplies: the exit charge and foreign-branch transfers (Sections 7(2)/7(8)) are valued at the lesser of cost (tax-inclusive, with specified add-ons) and OMV (Section 9(5) — the Triangle & Hippo Valley "method" annotation); instalment credit agreements at the cash value (Section 9(6)), keeping finance charges out of the base; change-in-use deemed supplies at OMV (Section 9(7)); partial decreases in taxable use by the A × (B − C) formula with a 10-percentage-point de minimis (Section 9(8)); cancelled lay-bys at the amount retained (Section 9(9)); the second-hand-goods zero-rating denial at the supplier's purchase price with a connected-persons greater-of rule (Section 9(10)); fringe benefits at the PAYE cash equivalent (Section 9(11), pairing Section 8(7)); public-authority payments at the amount paid (Section 9(12)); repossessions at the unrecovered balance of the cash value (Section 9(13)); bets and winnings at the amounts received and paid (Sections 9(14)–(15)); tokens, vouchers and stamps under a three-rule code (Sections 9(16)–(18) — monetary vouchers disregarded on issue, specified-goods vouchers nil on surrender, free discount vouchers added tax-inclusive to the redeeming supply); entertainment supplied out of input-denied acquisitions and medical-aid scheme supplies at nil (Sections 9(19)–(20)); mixed considerations apportioned (Section 9(21)); agent importations at import value plus the import tax (Section 9(22)); no-consideration supplies at nil save as otherwise provided (Section 9(23)); and clearing agents deemed to charge at least US$25 per bill of entry (Section 9(23a), inserted by Finance Act 8 of 2015 and adjusted by Finance Acts 8 of 2022 and 13 of 2023).

Section 9 is where the rate change is felt: every value it produces meets the rate fixed at the Section 8 time of supply — 15% for supplies timed up to 31 December 2025, 15.5% from 1 January 2026 — and every inclusive amount is decomposed with the matching fraction. This lesson walks each subsection with computations at the current rate, integrates the annotated cases, and closes with the practitioner's valuation map.

From charge to time to value

VAT liability is built in three steps: is the transaction charged (Section 6, with Section 7's deemings); when is it supplied (Section 8); how much is taxed (Section 9). The questions interlock — Section 8 fixes the rate era and the period; Section 9 fixes the base; output tax = base × rate. Because so many of Section 7's deemed supplies have no actual price (the exit charge, change of use, fringe benefits, branch transfers, repossessions), Section 9's special rules are not exotic appendices: they are the only way those supplies can be quantified at all. The Act's internal pattern repays memorisation — every deeming in Section 7 or 17 has a matched clock in Section 8 and a matched value in Section 9.

Why the value rules attract audits

Valuation is where VAT meets pricing, and where understatement is easiest: related-party transfers at sentimental prices, "free" supplies to shareholders, barter recorded at book values, hire-purchase output tax computed on instalments rather than cash value, indemnities and retained deposits banked gross, vouchers mishandled at issue or redemption. ZIMRA's audit teams work Section 9 against Section 3's OMV cascade; the operator's defence is contemporaneous valuation evidence. The burden of proof in any dispute lies on the taxpayer (Section 37 — Objections and Audits lessons).

Where this lesson sits

This lesson presupposes the Imposition lesson (the charge and Section 7), the Defined Terms lesson ("consideration", "consideration in money", "cash value", "connected persons", "tax fraction", and the Section 3 OMV cascade, which is not re-taught here), and the Time of Supply lesson (which fixes the rate the Section 9 value meets). It feeds the Input Tax lesson (the recipient's deduction is the tax properly chargeable on the Section 9 value), the Adjustments lesson (Sections 17(1)–(6), whose deemed supplies take their values from Sections 9(7)–(8)), and the Imports lesson (import values are Section 12's province — Section 9 governs supplies, not importations, except the agent-import echo in Section 9(22)).

B.1 Sections 9(1)–(3): the general rule

Section 9(1) declares the section the Act-wide value code for supplies. Section 9(2) states the rule: the value of a supply is the value of the consideration, less so much of that value as represents tax. VAT is thus charged on the tax-exclusive amount, while commercial prices are normally quoted inclusively; the two are reconciled by the provisos:

• Proviso (a) excludes from consideration the value of any postage stamp (as defined in Section 2 of the Postal and Telecommunications Act [Chapter 12:05]) used to pay for services of the successor postal company or a postal licensee — stamps are prepaid postage, already inside the postal pricing system.
• Proviso (b): where the tax portion is not accounted for separately, it is deemed to equal the tax fraction of the consideration. The margin note to the Triangle & Hippo Valley litigation (20-HMA-028; on appeal 21-SC-082) states the principle exactly: "the tax fraction is to be calculated from that consideration: not in addition to that consideration." A trader who charged USD 1,000 with no VAT shown owes 1,000 × 15.5/115.5 = USD 134.20 — not 1,000 × 15.5% = USD 155.

Section 9(3) then values the consideration itself: (a) money counts at its amount; (b) non-money consideration counts at its open market value, ascertained under Section 3 (Defined Terms lesson C.8). This is the provision that prices barter: each leg's consideration is the other leg's goods or services, valued at OMV (Mylo — Imposition lesson).

B.2 Section 9(4): the connected-persons OMV substitution

Three cumulative conditions trigger the substitution:

1. the supply is for no consideration or for money consideration less than OMV;
2. supplier and recipient are connected persons (the Section 2 web — Defined Terms lesson);
3. had the recipient paid OMV, he would not have been entitled under Section 15(3) to a full input tax deduction.

When all three hold, the consideration is deemed to be the OMV (R (Pvt) Ltd 19-HH-792; ZS (Pvt) Ltd 20-FAC-113 annotated at the entitlement condition). Condition 3 is the economic filter: if the recipient is a fully taxable operator, an undervalue merely shifts tax from one return to another — output down for the supplier, input down for the recipient — with no net revenue loss, so the Act does not interfere. The substitution targets transfers to final consumers, exempt users and partial recoverers within the connected circle. The proviso carves out employment benefits contemplated by Section 17(3): those are valued exclusively under Section 9(11) (the PAYE cash equivalent), even though employer and employee may technically be connected.

B.3 Section 9(5): exit charge and branch transfers — lesser of cost or OMV

For supplies deemed by Section 7(2) (deregistration exit charge) or Section 7(8) (transfers to a foreign branch), the consideration is deemed the lesser of:

• (a) cost to the operator of the acquisition, manufacture, assembly, construction or production of the goods or services, including: (i) any tax charged on the supply to him of the goods or of components, materials or services used; (ii) for goods or rights that constituted trading stock (as defined in Section 2 of the Income Tax Act), any further costs including tax; (iii) transport and delivery costs (including tax) for Section 7(8) transfers; and (iv) where the asset came in under a Section 9(4) OMV-substituted supply (or would have, but for the recipient's full-deduction entitlement), the OMV excess over the actual consideration is folded into cost; or
• (b) the open market value of the supply.

The margin note to Triangle & Hippo Valley (20-HMA-028 / 21-SC-082) describes the subsection as "a method aimed at assisting in the computation of the consideration of the deemed supply". The lesser-of design is deliberately taxpayer-moderate: the exit charge claws back input relief by reference to what the asset cost (tax-inclusive) unless the market value has fallen below it, in which case the lower market value governs. Depreciated assets therefore exit at OMV; appreciated assets exit at cost.

B.4 Sections 9(6) and 9(13): instalment credit — in and out

Section 9(6): goods supplied under an instalment credit agreement are valued at the cash value (the defined term — Defined Terms lesson C.3): the financier's cost-plus-tax (banker/financier limb) or the dealer's normal VAT-inclusive cash price plus financed installation (dealer limb). The finance charges — everything in the instalment stream above cash value — are outside the VAT base, consistent with the financial-services exemption for credit.

Section 9(13) completes the circle on default: where repossession triggers the Section 7(9) deemed supply by the debtor (timed under Section 8(8) — Time of Supply lesson), the consideration is the balance of the cash value not yet recovered at the deemed-supply date. The proviso fixes the computation: the balance is the cash value less so much of the debtor's payments as, on a proper apportionment under the agreement's rights and obligations, is attributable to the cash value (as opposed to finance charges). The financier's matching input credit is input tax paragraph (c) — the tax fraction (at the original supply's rate) of this Section 9(13) amount (Defined Terms lesson).

B.5 Sections 9(7)–(8): change-in-use values

Section 9(7): goods or services deemed supplied under Section 17(1) (full application to non-taxable use) are valued at OMV — the operator exits the asset from the taxable sphere at market price, mirroring a sale to himself.

Section 9(8): where Section 17(2) deems a supply on a decrease in the extent of taxable use, the consideration is determined by formula. The components, as enacted:

• A = the lesser of (a) the cost (tax-inclusive) of acquisition, manufacture, assembly, construction or production — with provisos folding in Section 9(4) OMV excesses, prior Section 17(4) "B" amounts, and the amounts from the most recent Section 17(2)/(5) adjustment — and (b) the OMV at the time the reduction is deemed by Section 17(6) to take place;
• B = the percentage of taxable use determined in the immediately preceding determination (under Section 16(1), 17(4), 17(5) or this subsection);
• C = the percentage of taxable use during the 12-month period of the decrease (counting only use for supplies whose input tax would not have been denied under Section 16(2)(a));
• De minimis proviso: where B exceeds C by not more than 10% of total use, C is deemed equal to B — no adjustment for drift within ten percentage points.

The detailed operation of the Section 17 adjustments (including the Section 17(4)/(5) increase-side formulas referenced inside "A") belongs to the VAT Adjustments and Change-in-Use lesson; what matters here is the valuation logic: the base is capped at the lower of historic tax-inclusive cost and current market, and only the swing in taxable use is taxed.

B.6 Sections 9(9), 9(12), 9(14)–(15): payment-mirror values

Four deemed supplies are valued simply at the money that moved: the cancelled lay-by service at the amount retained or recovered (Section 9(9), pairing Section 7(4)(b)); services deemed supplied to a public or local authority at the amount of the payment made by the authority (Section 9(12), pairing Section 7(5)); the bookmaker's service at the amount received in respect of the bet (Section 9(14), pairing Sections 7(11) and 8(3)(f)); and the winnings-linked service at the amount received as a prize or winnings (Section 9(15), pairing Sections 7(12) and 8(3)(g)). In each case the amount is treated as tax-inclusive consideration, the tax extracted at 15.5/115.5.

B.7 Section 9(10): the second-hand goods anti-abuse value

Section 9(10) serves the proviso to Section 10(1): where goods would be zero-rated (typically as exports) but for that proviso — which denies zero-rating where a notional input tax deduction was claimed on second-hand goods — the consideration is deemed equal to the supplier's purchase price of the goods. Two provisos harden the rule against connected-circle structuring: (a) where the notional deduction was made by another person connected to the supplier, the deemed consideration is the greater of the supplier's and that other person's purchase prices; and (b) the purchase price is not reduced by any input tax deducted. The policy: a trader cannot buy second-hand goods from non-operators, harvest the notional input credit, and then export the goods at the zero rate — the export is re-valued to neutralise the credit (Imports & Exports lesson for the zero-rating side).

B.8 Section 9(11): fringe benefits

Where Section 17(3) deems a benefit or advantage granted to an employee or office holder to be a supply, the consideration is the cash equivalent of the benefit as contemplated in Section 8(7) — i.e., the amount determined under Section 8(1)(f) of the Income Tax Act [Chapter 23:06] and the Thirteenth Schedule for PAYE purposes (deemed motoring benefit tables, housing values, and the rest — Specific Inclusions lesson in the income tax course). VAT borrows PAYE's number and PAYE's month (Section 8(7) — Time of Supply lesson), and Section 9(4)'s OMV substitution expressly stands aside (its proviso). Employers therefore run one benefits valuation for both taxes.

B.9 Sections 9(16)–(18): the voucher code

• 9(16) Monetary-value vouchers. Where a token, voucher or stamp states a monetary value and is granted for money consideration (gift cards, airtime vouchers), the issue is disregarded for VAT — except to the extent the consideration exceeds the stated value (a premium is taxed). The VAT event happens later, on redemption, when real goods or services are supplied against the voucher.
• 9(17) Specified-goods vouchers. Where the voucher entitles the holder to specified goods or services without further charge (a "one car wash" voucher sold for cash), the issue is the taxed event (it is a supply of the specified services sold for the consideration), and the value of the supply made on surrender is deemed nil — preventing double taxation.
• 9(18) Free discount vouchers. Where an operator issues a token for no consideration entitling the holder to a discount from another supplier, the redeeming supplier's consideration is deemed to include the monetary value stated on the voucher (tax-inclusive, per the proviso) — because the issuer typically reimburses the redeeming supplier, and the discount must not erode the base. Postage stamps are excluded throughout (they have their own rule in Section 9(2) proviso (a)).

B.10 Sections 9(19)–(23a): nil values, apportionment and floors

• 9(19) Entertainment at nil. Where an operator supplies entertainment and input tax on the underlying acquisitions was denied under Section 16 (the entertainment denial — Input Tax lesson), the supply's value is nil: the system taxed the entertainment by blocking the credit; taxing the output too would double-charge. The staff canteen that recovers nothing on its food purchases charges no output tax on subsidised meals.
• 9(20) Medical-aid schemes at nil. Supplies of medical, dental or other goods and services by a scheme contemplated in Section 16(2)(c) are valued at nil — the same credit-side logic.
• 9(21) Apportionment. Where a taxable supply is not the only matter to which a consideration relates, the supply is valued at the part of the consideration properly attributable to it. This is the valuation partner of Section 7(13)'s splitting rule (Imposition lesson): mixed bundles are split, then priced by fair attribution.
• 9(22) Agent importations. Goods deemed supplied under Section 7's agent-importation rule are valued at the Section 12(2) importation value plus the Section 6(1)(b) import tax — the agent passes the goods on at their full landed, tax-paid amount (timed, per Section 8(9), when the agent pays the import tax).
• 9(23) Nil default. Save as otherwise provided in Section 9, a supply for no consideration is valued at nil. The default protects genuine free samples and donations from valuation; the "save as otherwise provided" tail is the warning — Sections 9(4), 9(5), 9(7), 9(8) and 9(11) all override it for their situations.
• 9(23a) Clearing agents. Every clearing agent is deemed to charge a clearance fee of at least US$25 (or other prescribed amount) on each bill of entry — inserted by Finance Act 8 of 2015 (w.e.f. 1 September 2015), with the fee adjusted by Finance Act 8 of 2022 (w.e.f. 24 October 2022) and Finance Act 13 of 2023 (w.e.f. 29 December 2023). Output tax floors at 25 × 15.5/115.5 = USD 3.35 per bill regardless of the fee actually charged. (Note the parallel registration-threshold floor of US$50 per bill in Section 23(1) — Registration lesson; the two floors serve different computations and carry different figures on the source consolidation.)

C.1 Inclusive prices and the fraction: the arithmetic of Section 9(2)

Zimbabwean retail prices are quoted VAT-inclusive; the statute taxes the exclusive value. The reconciliation: value = consideration − tax; tax = consideration × r/(100 + r). At 15.5%: a USD 231 inclusive sale has value 231 − 31 = USD 200 and tax USD 31 (231 × 15.5/115.5). The Triangle & Hippo Valley principle then does its most important practical work on assessment: when ZIMRA assesses an operator who never charged VAT, the gross takings are treated as inclusive consideration — the operator's margin absorbs the tax. The converse discipline for pricing: an operator who wants to net USD 200 must charge 200 × 1.155 = USD 231.

C.2 Why Section 9(4) has three conditions — and what escapes it

Strip any one condition and the substitution fails: an arm's-length undervalue (conditions 1 satisfied, 2 failed) is just a bad bargain — VAT taxes actual consideration, not foregone profit; a connected-party undervalue to a fully recovering operator (condition 3 failed) is revenue-neutral and ignored; a connected-party full-price sale (condition 1 failed) needs no correction. What remains in the net: gratuitous or cheap transfers to shareholders, directors and relatives (final consumers), to exempt group members (banks, schools, medical aid societies), and to partially exempt affiliates. For them, OMV — built by the Section 3 cascade — replaces the price. Practical defence file: contemporaneous comparables, valuations, and the recipient's input-recovery profile.

C.3 The lesser-of logic of Section 9(5)

The exit charge and branch-transfer values answer a clawback question, not a profit question. The input tax originally claimed was a function of cost; the asset's current usefulness is a function of OMV. Charging the lesser of the two means: for a depreciated asset (OMV < cost) the State recoups only the credit attributable to the value still in hand; for an appreciated asset (cost < OMV) the State recoups exactly the original credit base and leaves the gain alone (gains are income tax's business). The cost limb's add-ons — tax included, trading-stock further costs, delivery costs on branch transfers, and the Section 9(4) OMV-excess fold-in — keep the comparison honest.

C.4 Hire purchase from cradle to grave

The ICA value rules form a closed system. At delivery: output tax on the cash value (Section 9(6)), timed by Section 8(3)(c), rate locked. During the term: instalments carry no VAT (finance charges are exempt-territory credit). On default and repossession: the debtor's deemed supply (Section 7(9), timed by Section 8(8)) is valued at the unrecovered cash-value balance (Section 9(13)) — payments first apportioned between cash value and finance charges per the agreement — and the financier's input tax paragraph (c) credit is the original-rate fraction of that amount. Result: across the whole life, the State keeps exactly the tax on the cash value actually paid for, no more, no less.

C.5 The voucher triangle

Classify the instrument first: (i) stored value (monetary amount stated) — tax waits for redemption (Section 9(16)); (ii) prepaid specific supply — tax at issue, nil at surrender (Section 9(17)); (iii) free discount instrument — tax at redemption on price plus voucher face value, tax-inclusive (Section 9(18)). Misclassification produces either double tax (taxing a gift card at issue and redemption) or a leak (treating a sold service voucher as stored value and never taxing the issue when redemption goes unrecorded). Loyalty programmes, airtime distribution chains and fuel-coupon schemes all live or die on this triangle.

C.6 The nil values are credit-side mirrors

Sections 9(19), 9(20) and 9(23) only make sense against Section 16: where the system denied the input credit (entertainment; medical schemes) it relieves the output; where nothing was paid and no special rule applies, there is nothing to tax. The order of analysis is therefore: first establish the input-side treatment, then read off the output value. An operator who was allowed input tax on entertainment (one of the Section 16 exceptions, e.g. entertainment supplied for consideration in the ordinary course) does not get the nil value — Section 9(19) is conditioned on the denial.

D.1 Individuals and sole traders

Scenario 1 — the unregistered-in-name trader assessed. Tinashe traded above the threshold without registering and banked USD 92,400 of takings in 2026. Assessed, his value of supplies is 92,400 − tax; tax = 92,400 × 15.5/115.5 = USD 12,400 (Triangle & Hippo Valley extraction, proviso (b)); he cannot add 15.5% to historical prices retroactively.

Scenario 2 — the director's bakkie. Moyo Hardware (Pvt) Ltd gives its 60% shareholder-director a trading-stock bakkie for USD 1,000 when OMV is USD 9,240. Connected persons; below OMV; the director (a private consumer) would recover nothing. Section 9(4) deems consideration = USD 9,240: output tax 9,240 × 15.5/115.5 = USD 1,240, not 1,000 × 15.5/115.5 = USD 134.20. Had the same bakkie gone at the same price to the company's fully taxable sister distribution company, condition 3 fails and the actual USD 1,000 stands.

D.2 SMEs and partnerships

Scenario 3 — hire purchase, default and repossession. Kombi World (dealer) supplies a minibus under an ICA on 10 February 2026: cash value USD 34,650 (inclusive); 30 instalments totalling USD 41,000. Delivery output tax: 34,650 × 15.5/115.5 = USD 4,650 in February. The USD 6,350 finance-charge stream is untaxed. After payments of USD 16,400 — of which, properly apportioned under the agreement, USD 13,860 relates to cash value — the buyer defaults and the minibus is repossessed (deemed supply timed post-reinstatement, Section 8(8)). Section 9(13) consideration = 34,650 − 13,860 = USD 20,790; the financier's input tax paragraph (c) credit = 20,790 × 15.5/115.5 = USD 2,790 (2026-rate deal, so the original fraction is 15.5/115.5).

Scenario 4 — the gift-card programme. Avondale Books sells USD 50 gift cards (monetary value stated) for USD 50: issue disregarded (Section 9(16)) — no output tax yet. It also sells a "Premium Wrap Service" voucher for USD 11.55 entitling the holder to that specified service: taxed at issue (11.55 × 15.5/115.5 = USD 1.55), and nil on surrender (Section 9(17)). At Christmas it mails out free "USD 5 off at PaperHouse" coupons; when PaperHouse redeems one against a USD 23.10 sale (and is reimbursed by Avondale), PaperHouse's consideration is deemed 23.10 + 5 = USD 28.10 inclusive: output tax 28.10 × 15.5/115.5 = USD 3.77 (Section 9(18), value tax-inclusive).

Scenario 5 — the staff canteen. Gweru Engineering runs a canteen, input tax on food denied as entertainment (Section 16). It charges staff a token USD 1 per meal. Value of each meal supply: nil (Section 9(19)) — no output tax — because the credit denial already taxed the consumption. If instead it ran the canteen as a profit centre within a Section 16 exception and recovered input tax, the USD 1 (and any Section 9(4) analysis for connected staff — note the Section 17(3)/9(11) route for true fringe benefits) would be in play.

D.3 Large corporates and multinationals

Scenario 6 — deregistration of a division (Section 9(5)). On group restructuring, Matobo Cement deregisters an operation holding: cement stock that cost USD 46,200 (tax-inclusive) with OMV USD 57,750; and a packing line that cost USD 80,850 with OMV now USD 34,650. Exit-charge consideration: stock — lesser of cost and OMV = USD 46,200 → tax 46,200 × 15.5/115.5 = USD 6,200; packing line — lesser = USD 34,650 → tax USD 4,650. The appreciated stock exits at cost; the depreciated line at market. (No Section 55 continuity assumed.)

Scenario 7 — fringe benefit valuation (Section 9(11)). Hwange Power assigns an executive a 3,200cc company vehicle for private use through 2026. PAYE's Thirteenth Schedule deemed motoring benefit fixes the monthly cash equivalent (per the income tax tables — Specific Inclusions lesson); say it is USD 1,660 per month for the band. VAT: a deemed supply each month-end (Section 8(7)) for a consideration of USD 1,660 (Section 9(11)), output tax 1,660 × 15.5/115.5 = USD 222.77 monthly. Section 9(4) does not apply (its proviso); PAYE's number is conclusive.

Scenario 8 — the public-authority top-up (Sections 7(5)/9(12)). A municipality pays Harare Clean (Pvt) Ltd a USD 34,650 quarterly subsidy in respect of its taxable refuse-collection supplies to residents. The payment is deemed consideration for services to the authority (Section 7(5)), valued at the amount paid (Section 9(12)): output tax 34,650 × 15.5/115.5 = USD 4,650 per quarter — over and above the output tax on residents' charges.

Scenario 9 — second-hand exports through the group (Section 9(10)). Trader A (operator) buys used mining compressors from non-operators for USD 23,100, claiming the notional second-hand input credit; sells them to connected Trader B for USD 24,000; B exports them. The proviso to Section 10(1) denies zero-rating; Section 9(10) values B's export supply at the greater of A's and B's purchase prices = USD 24,000 (unreduced by the credit, proviso (b)): output tax 24,000 × 15.5/115.5 = USD 3,220.78. The notional credit harvested upstream is neutralised.

• Triangle Ltd & Hippo Valley Estates v ZIMRA & 10 Ors 20-HMA-028, on appeal 21-SC-082. Annotated twice in Section 9: at the proviso to Section 9(2) — "the tax fraction is to be calculated from that consideration: not in addition to that consideration" — and at Section 9(5), described as "a method aimed at assisting in the computation of the consideration of the deemed supply of goods or services". The litigation is the working authority for both the inclusive-extraction principle and the lesser-of computation for deemed supplies.
• R (Pvt) Ltd v ZIMRA 19-HH-792 (High Court). Annotated at Section 9(4) (and at Section 3 — Defined Terms lesson): the OMV substitution applied to connected-person/no-consideration dealings through the statutory cascade.
• ZS (Pvt) Ltd v ZIMRA 20-FAC-113 (Fiscal Appeal Court). Annotated at Section 9(4)(c) and Section 3(4): the entitlement-to-full-deduction condition and the similar-supply OMV fallback.
• Mylo (Pvt) Ltd v ZIMRA 16-HH-717 (High Court). The barter authority (Imposition lesson): each leg a supply, non-money consideration valued at OMV via Section 9(3)(b).
• Jinda B & M v Viewbit Investments (Pvt) Ltd & Registrar of Deeds 17-HH-014 (High Court). The fixed-property/notional-input timing companion (Time of Supply lesson) — the Section 9-derived value meets the input tax paragraph (b) stamp-duty cap.

1. Adding the rate instead of extracting the fraction. On any inclusive or assessed amount, tax = amount × 15.5/115.5 (Triangle & Hippo Valley). Adding 15.5% on top overstates tax by the fraction's square — and on OMVs (which are statutorily inclusive, Section 3(1)(b)) it is always wrong.
2. Valuing barter legs at book or sentiment. Non-money consideration takes OMV through the Section 3 cascade (Section 9(3)(b)); "no invoice, no value" is not a position.
3. Applying Section 9(4) to every cheap related-party deal. Check condition 3: a fully recovering connected recipient defeats the substitution. Conversely, do not assume arm's-length undervalues are caught — they are not; Section 9(4) is a connected-persons rule.
4. Computing hire-purchase VAT on instalments. The base is the cash value at delivery (Section 9(6)); instalments are tax-free credit. And on repossession, the base is the unrecovered cash-value balance after proper apportionment (Section 9(13)) — not the resale proceeds.
5. Running the exit charge on OMV alone. Section 9(5) is lesser of tax-inclusive cost or OMV — for appreciated stock the cost limb governs and is lower. Build both limbs before filing the final return.
6. Taxing gift cards at issue — or service vouchers never. Stored-value vouchers: redemption taxed, issue disregarded (Section 9(16)); specified-supply vouchers: issue taxed, surrender nil (Section 9(17)); free discount coupons: redeemer's consideration grossed up by the (tax-inclusive) face value (Section 9(18)).
7. Charging output tax on input-denied entertainment. The value is nil (Section 9(19)) — but only where the denial actually applied; a canteen with recovered inputs has no nil value to claim.
8. Ignoring the fringe-benefit bridge. Benefits are valued at the PAYE cash equivalent (Section 9(11)) at PAYE's month-end (Section 8(7)); do not re-value them at OMV under Section 9(4) (its proviso forbids it) and do not omit them because "no money moved".
9. Forgetting the apportionment duty. One price covering taxable and other matters must be split by proper attribution (Section 9(21), with Section 7(13)) — lazy 100% standard-rating overcharges customers; lazy zero-rating undercharges the fisc and fails Section 10(3) proof.
10. Clearing agents invoicing below the floor. Output tax is computed on at least US$25 per bill of entry (Section 9(23a), as adjusted) — and the registration count uses its own US$50-per-bill floor (Section 23(1)); the two floors are not interchangeable.

Work through the questions one at a time. Choose an answer and it is graded immediately, with an explanation and the provision it comes from. Your progress is saved, so you can stop and resume.

• General rule (Section 9(2)–(3)): value = consideration less the tax element; money at face, non-money at OMV (Section 3 cascade); undeclared tax is extracted by the fraction, never added (Triangle & Hippo Valley); postage stamps excluded.
• Connected persons (Section 9(4)): no/under-OMV consideration + connection + recipient not fully creditable → OMV substituted (R (Pvt) Ltd; ZS (Pvt) Ltd); fringe benefits carved out.
• Deemed-supply values: exit charge/branch transfers — lesser of tax-inclusive cost or OMV (Section 9(5)); change-in-use — OMV (Section 9(7)); partial decrease — the Section 9(8) formula on A, B, C with the 10-point de minimis; lay-by retention, authority payments, bets, winnings — the money that moved (Sections 9(9), (12), (14), (15)).
• Credit deals: ICA value = cash value (Section 9(6)); finance charges untaxed; repossession = unrecovered cash-value balance with apportionment (Section 9(13)); financier's notional credit at the original fraction.
• Vouchers: stored value — redemption taxed (Section 9(16)); specified supply — issue taxed, surrender nil (Section 9(17)); free discount coupons — redeemer grossed up, tax-inclusive (Section 9(18)).
• Nil values mirror credit denials: input-denied entertainment (Section 9(19)) and Section 16(2)(c) medical schemes (Section 9(20)) at nil; free supplies default to nil (Section 9(23)) save as otherwise provided.
• Apportion mixed considerations by proper attribution (Section 9(21), with Section 7(13)); agent imports at import value + import tax (Section 9(22)); clearing agents floored at US$25 per bill (Section 9(23a), as adjusted 2022/2023).
• Fringe benefits borrow PAYE: cash equivalent (ITA Section 8(1)(f)/Thirteenth Schedule) as value (Section 9(11)), PAYE month-end as time (Section 8(7)).
• Rate meets value at the time of supply: 15% through 31 December 2025, 15.5% (fraction 15.5/115.5) from 1 January 2026 — locked per supply by Section 8, applied to the Section 9 base.

Table 1 — Section 9 value rules mapped to their deeming provisions

Supply	Value rule	Provision pair
Ordinary supply	Consideration less tax; money at face, non-money at OMV	Section 9(2)–(3)
Undervalued connected-person supply	OMV substituted (3 conditions)	Section 9(4) ← Section 2 "connected persons"
Exit charge / foreign-branch transfer	Lesser of tax-inclusive cost (with add-ons) or OMV	Section 9(5) ← Section 7(2)/7(8)
Instalment credit agreement	Cash value	Section 9(6) ← Section 8(3)(c)
Change in use (full)	OMV	Section 9(7) ← Section 17(1)
Decrease in taxable use	Formula on A (lesser of cost/OMV), B, C; 10-point de minimis	Section 9(8) ← Section 17(2)
Cancelled lay-by	Amount retained/recovered	Section 9(9) ← Section 7(4)(b)
Second-hand goods export denial	Supplier's purchase price; connected greater-of	Section 9(10) ← Section 10(1) proviso
Fringe benefit	PAYE cash equivalent	Section 9(11) ← Section 17(3), Section 8(7)
Public-authority payment	Amount of payment	Section 9(12) ← Section 7(5)
Repossession	Unrecovered cash-value balance	Section 9(13) ← Section 7(9), Section 8(8)
Bets / winnings	Amounts received / paid	Section 9(14)–(15) ← Section 7(11)–(12)
Vouchers	Issue disregarded / issue taxed–surrender nil / face value added	Section 9(16)–(18)
Input-denied entertainment; medical schemes	Nil	Section 9(19)–(20) ← Section 16
Mixed consideration	Proper attribution	Section 9(21) ← Section 7(13)
Agent importation	Import value + import tax	Section 9(22) ← Section 7 agent rule, Section 8(9), Section 12(2)
No consideration (default)	Nil, save as otherwise provided	Section 9(23)
Clearing agents	Deemed fee ≥ US$25 per bill of entry	Section 9(23a) (FA 8/2015; 8/2022; 13/2023)

Table 2 — Extracting versus adding the tax (15.5%)

Given	Computation	Tax	Value
Inclusive price USD 231.00	231 × 15.5/115.5	31.00	200.00
Exclusive value USD 200.00	200 × 15.5%	31.00	200.00
Assessed gross takings USD 11,550 (no VAT charged)	11,550 × 15.5/115.5	1,550.00	10,000.00
OMV USD 9,240 (always inclusive — Section 3(1)(b))	9,240 × 15.5/115.5	1,240.00	8,000.00

Diagram — choosing the value rule

flowchart TD
 A["Supply charged (Section 6/Section 7) and timed (Section 8)"] --> B{Deemed supply?}
 B -->|"Exit charge / branch transfer (7(2)/7(8))"| C["Lesser of tax-inclusive cost or OMV - Section 9(5)"]
 B -->|"Change in use (17(1)/17(2))"| D["OMV - Section 9(7); or A x (B - C) formula - Section 9(8)"]
 B -->|"Fringe benefit (17(3))"| E["PAYE cash equivalent - Section 9(11)"]
 B -->|"Repossession (7(9))"| F["Unrecovered cash value - Section 9(13)"]
 B -->|"Lay-by retention / authority payment / bets"| G["The money that moved - Section 9(9)/(12)/(14)/(15)"]
 B -->|No| H{Instalment credit agreement?}
 H -->|Yes| I["Cash value - Section 9(6)"]
 H -->|No| J{Connected persons, under OMV, recipient not fully creditable?}
 J -->|Yes| K["OMV substituted - Section 9(4)"]
 J -->|No| L{Consideration in money?}
 L -->|Wholly| M["Amount of money - Section 9(3)(a)"]
 L -->|Partly or not| N["OMV of non-money part - Section 9(3)(b) via Section 3"]
 M --> O["Value = consideration less tax; tax = fraction 15.5/115.5 - Section 9(2)"]
 N --> O
 K --> O
 I --> O
 C --> O
 D --> O
 E --> O
 F --> O
 G --> O

Statutes & sections

• Value Added Tax Act [Chapter 23:12] — Section 9 (value of supply: (1)–(3) general rule and provisos; (4) connected-persons OMV substitution and fringe-benefit proviso; (5) exit-charge/branch-transfer lesser-of rule; (6) ICA cash value; (7)–(8) change-in-use values and formula; (9) lay-by retention; (10) second-hand goods denial value; (11) fringe-benefit cash equivalent; (12) authority payments; (13) repossession balance; (14)–(15) bets and winnings; (16)–(18) vouchers; (19)–(20) nil values; (21) apportionment; (22) agent imports; (23) nil default; (23a) clearing-agent floor). Cross-referenced: Section 2 (consideration; consideration in money; cash value; connected persons; tax fraction), Section 3 (OMV), Section 6, Section 7(2), (4)(b), (5), (8), (9), (11)–(13), Section 8(3)(c), (7), (8), (9), Section 10(1) proviso, Section 12(2), Section 15(3), Section 16, Section 17(1)–(6), Section 23(1), Section 37.
• Income Tax Act [Chapter 23:06] — Section 8(1)(f) and Thirteenth Schedule (cash equivalent of benefits) via VAT Act Sections 8(7)/9(11); Section 2 "trading stock" via Section 9(5)(a)(ii).
• Postal and Telecommunications Act [Chapter 12:05] — Section 2 "postage stamp" via Section 9(2) proviso (a) and Sections 9(16)–(17).
• Finance Act 8 of 2015 (Section 9(23a) insertion, w.e.f. 1 Sep 2015); Finance Act 8 of 2022 and Finance Act 13 of 2023 (clearing-agent fee adjustments). Finance Act, 2025 (Act No. 7 of 2025) — 15.5% rate w.e.f. 1 Jan 2026 (fraction 15.5/115.5).

Case law

• Triangle Ltd & Hippo Valley Estates v ZIMRA & 10 Ors 20-HMA-028; on appeal 21-SC-082 — tax fraction extracted from, not added to, consideration (Section 9(2) proviso (b)); Section 9(5) as the computation method for deemed supplies.
• R (Pvt) Ltd v ZIMRA 19-HH-792 — Section 9(4) OMV substitution; Section 3 machinery.
• ZS (Pvt) Ltd v ZIMRA 20-FAC-113 — Section 9(4)(c) entitlement condition; Section 3(4) similar supply.
• Mylo (Pvt) Ltd v ZIMRA 16-HH-717 — barter; non-money consideration at OMV (Section 9(3)(b)).
• Jinda B & M v Viewbit Investments (Pvt) Ltd & Registrar of Deeds 17-HH-014 — fixed-property value/timing/notional-credit interaction.

ZIMRA guidance

• ZIMRA public notices on the 15.5% rate (January 2026) — the fraction applied throughout this lesson (;).
• ZIMRA, Comprehensive Guide to the VAT 7 — declaration of output values and tax (Compliance lesson).