Zambia legal and accounting and tax considerations in 2023
Corporate income tax considerations
- All companies in Zambia are subject to a standard corporate income tax rate of 30%;
- Local mining companies however are subject to i) a reduced corporate tax rate of 30% and ii) a variable profit tax of up to 15%;
- The Value-Added Tax (VAT) is levied at a standard rate of 16% on the sales of goods and services;
- A 15% withholding tax is applicable on i) interests ii) dividends iii) royalties and iv) technical services fees paid to both resident and non-resident entities, unless reduced under a tax treaty;
- Branches are subject to an additional 15% branch remittance tax on income remitted to their parent company.
Other taxes applicable in Zambia include
- Companies engaged in manufacture of non-traditional products and chemical fertilizers are subject to corporate tax rate of 15%;
- A reduced corporate income tax rate of 10% is applicable to Zambian companies engaged in farming and other agricultural activities;
- Sales and transfers of land and buildings are subject to a property tax of 5%;
- Businesses in Zambia must also pay Social Security and unemployment insurance contributions of 9% of gross salaries;
- Zambian companies can carry forward their losses for up to 10 years;
Tax administration and other considerations
- All companies in Zambia are obliged to file tax returns by the 30th of June every year failure to which a penalty of US$80 per month is chargeable;
- Value Added Tax (VAT) filings are to be submitted monthly to the Zambia Revenue Authority;
- The Republic of Zambia has signed 17 double tax treaties with different countries including Italy, Ireland, France, UK and Sweden among other jurisdictions;
- It is important our Clients are aware of their personal and corporate tax obligations in their country of residence and domicile; and they will fulfill those obligations annually. Let us know if you need Healy Consultants’ help to clarify your annual reporting obligations.
- Zambian Government requires that a company’s Annual Return is filed within three months of the financial year end. Non-filing of annual returns can result in the company being struck-off the register.
- An Annual Return gives a record of the company’s main business activity, the location of its premises and details regarding the directors, secretary and members.
- The government fee for a private company’s annual return is 200 Zambian Kwacha.