EMM Tax Bulletins – 2019

Tax Overview 2019

• In Zambia, Income Tax is governed by the Income Act of 2004 Cap 323 and administered by the Zambia Revenue Authority (ZRA). The registrar of Companies advises the Commissioner for Inland Revenue of registration of new companies. The ZRA runs an income tax system where income tax is deducted from individuals at source through self assessment and Pay As You Earn (PAYE). The ZRA Office issues income tax computation tables for guidance to tax payers. PAYE is expected to be paid for every 10th month after the month of actual pay.
• In order to be liable to tax in Zambia a person has to be in receipt of income from a source within or deemed to be within the Republic.
• A company incorporated in the Republic is liable to tax on the trading profits, Zambian dividends and interest.
• A partnership is not liable to tax in Zambia but the income is divided among the partners who are taxed on the partnership income.
• An individual ordinarily resident in Zambia is liable to tax on interest and dividends received from a source outside the Republic.
• A non-resident is liable to pay tax if he is in receipt of income from a source within Zambia.

Double Taxation

Zambia has double tax agreements with a few countries to prevent the taxation of the same income in either country. A foreign resident business undertaking will only be liable to tax if business is conducted in Zambia through a Permanent Establishment.

Where a double taxation agreement exists between Zambia and another country, foreign tax payable by an investor to the other country in respect of any foreign income shall be allowed as a credit for that investor against Zambia in respect of that foreign income.

Taxation of Companies

 For tax purposes, a company means any company incorporated or registered under any law force in Zambia or elsewhere.

Charge Of Tax

 All companies whether they are resident or non – resident in Zambia and are in receipt of income, which has a source or deemed source in Zambia, are liable to tax.

Residence Of Companies

 A company is resident in Zambia for tax purposes if:

• the company is incorporated or formed in Zambia; or
• the central, management and control of the company’s business or affairs are exercised in Zambia.

Submission Of Tax Returns

 All companies in receipt of income are required to submit tax returns not later than 30th June  following the end of the charge year. Where the company submits a tax return late, a penalty is charged.

Submission Of Provisional Tax Returns

All companies in receipt of income are required to submit provisional tax returns not later than 31st March of the charge year to which the return relates. Four provisional tax payment dates, as shown below, are made per each tax year.

First Quarter                        14th April
Second Quarter                       14th July
Third Quarter                        14th October
Fourth Quarter                       14th January

A penalty per month or part thereof is charged for failure to submit the provisional return.

Registration For New Companies

Under the Income Tax Act, all new companies incorporated or formed in Zambia are to be registered for tax purposes at the nearest Direct Taxes office or Advice Centre in Lusaka.

Download the EMM Tax Bulletins for 2019 here