Zambia

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 2024 tax charge year are due as follows:

• 1st quarter return due 31 March 2024 (or 5 March 2024 if submitted manually).
• 2nd quarter return due on 30 June 2024.
• 3rd quarter return due on 30 September 2024.
• 4th quarter return due on 31 December 2024.

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 2023 tax charge year is due for submission by 21 June 2024.

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 2023 tax charge year, if submitted manually, is due for submission by 5 June 2024.

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

The Income Tax Act provides that an assessment shall not be made for a charge year after six years from the end of that charge year. In cases of fraud or wilful default, the assessment period may be extended to periods exceeding six years. With respect to transfer pricing, the assessment period covers up to ten years.

Topics of focus for tax authorities

The ZRA is devoting a significant amount of time to transfer pricing audits, and there is expected to be an increasing scrutiny.

In addition to the above, the ZRA has placed significant emphasis on enforcement of tax laws and audits across all tax types. This includes desktop audits and detailed on site audits, as well as taxpayer account reconciliations.

General Anti-Avoidance Rules (GAAR)

GAAR applies to transactions that understate taxable income or overstate non-deductible expenses in Zambia.