Zambia

Corporate - Tax administration

Last reviewed - 14 February 2020

Taxable period

CIT is determined by reference to a charge year, being the period of 12 months ending on 31 December.

Tax returns and payment of tax

The CIT rules require taxpayers to submit provisional tax returns in the first quarter of each charge year. Where there is a change in forecast, a revised return may be submitted at the end of either the second, third, or fourth quarters of the charge year. Provisional tax payments are required to be made quarterly. The provisional tax liabilities must be based on the estimated taxable income for the current charge year.

The quarterly returns for the 2020 tax charge year are due as follows:

  • 1st quarter return due 31 March 2020 (or 5 March 2020 if submitted manually).
  • 2nd quarter return due on 30 June 2020.
  • 3rd quarter return due on 30 September 2020.
  • 4th quarter return due on 31 December 2020.

By concession, the ZRA allows a 10-day grace period for the payment of taxes. Accordingly, each quarterly payment can be made on the 10th day of the month following the end of each quarter.

The final tax return needs to be submitted by 21 June following the end of the tax year. This must be accompanied by any balance of tax that remains unpaid. For example, the final tax return for the 2019 tax charge year is due for submission by 21 June 2020.

In the case of a manually filed tax return, the tax return needs to be submitted by 5 June following the end of the tax year. For example, the final tax return for the 2019 tax charge year, if submitted manually, is due for submission by 5 June 2020.

Tax audit process

The Commissioner-General of the ZRA has wide powers to require any person to attend to be examined at a time and place specified by notice, where it is determined that person is able to impart information necessary for the purposes of the Income Tax Act.

Furthermore, the Income Tax Act empowers the Commissioner General of the ZRA to access any type of information required for tax purposes held by legal practitioners, accountants, and financial institutions.

Statute of limitations

There is no provision that specifically provides for a statute of limitation. However, in practice, it is accepted that the revenue authorities cannot investigate any cases after six years following the end of the charge year except in cases of fraud or wilful default. This is on the basis that taxpayers are only required to maintain documentation for a period of six years from end of the relevant charge year.

The document retention period for transfer pricing is ten years.

Topics of focus for tax authorities

The ZRA is devoting a significant amount of time to transfer pricing audits, and this is expected to be an increasing focus of scrutiny, especially with the 2018 Regulations that were recently enacted.

In addition to the above, following the tax amnesty program that was available in 2017, the ZRA has placed significant emphasis on enforcement of tax laws and has thus increased audits across all tax types. This includes desktop audits as well as detailed on site audits.