Zambia

In Zambia, a corporate entity is considered a resident for tax purposes if it meets any of the following criteria:

• The entity is incorporated or established under Zambian law.
• The entity's effective management is situated in Zambia during a charge year.

Entities meeting these conditions are subject to Zambian tax regulations for the relevant charge year.

Permanent establishment (PE)

In Zambia, the concept of PE is pivotal for non-resident entities to understand their tax obligations. A non-resident may be deemed to have a Zambian PE if it operates through a fixed place of business within the country or engages a dependent agent authorised to conclude contracts on its behalf.

The domestic definition aligns closely with the Organisation for Economic Co-operation and Development (OECD) Model Tax Convention, detailing both inclusive and exclusive activities for a fixed place of business. Notably, the provision of services, including consultancy, by a non-resident enterprise via employees or personnel for more than 90 days within a 12-month period triggers PE status.

It is crucial to consider applicable double tax treaties (DTTs), as they may change the PE definition and take precedence over domestic law.

Anti Fragmentation Rule 

Effective 1 January 2026, the ITA introduces an anti-fragmentation rule. Under this provision, a fixed place of business will not be considered as carrying out merely preparatory or auxiliary activities if the enterprise, or a related enterprise, conducts additional business activities in Zambia and the aggregate activities are substantive. 

This change is particularly significant for multinational enterprises with fragmented operations. Businesses will need to review their supply chains and operational structures to ensure they do not unintentionally create a permanent establishment in Zambia.