Corporate - Corporate residence

Last reviewed - 17 May 2024

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 Permanent Establishment (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 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.