Zambia

Corporate - Withholding taxes

Last reviewed - 20 August 2020

Payments of the following items of Zambian-source income may be subject to WHT. The relevant rates under domestic legislation are as follows:

Category of payment Rate on payment to Zambian resident (%) Rate on payment to non-Zambian resident (%)
Dividends 15 (1) 20 (1)
Interest 15 (3) 20 (1)
Interest from a Lusaka Securities Exchange listed Property Loan Stock Company 0 15
Coupon income (interest) on government bonds 15 15
Management or consultancy fee 15 20
Royalties 15 20
Rent from a Zambian source 10 (2) 10
Commissions 15 20
Construction and haulage contractors 0 20
Public entertainment fees to entertainers/sports persons 0 20

Notes

  1. 0% if paid by a mining company or a company listed on the Lusaka Securities Exchange to individual shareholders.
  2. 10% WHT on rent is a final tax.
  3. Interest payable to local banks and financial institutions licensed under the Banking and Financial Services Act, 2017 is exempt from WHT.

The WHT liability arises by reference to the date of payment, the date of accrual (i.e. the date the recipient has a legal right to claim the payment), or the time when income is in any way due to a person or held to that person’s order.

WHT is due to be paid within 14 days of the end of the month to which the payment or accrual relates.

Zambia has DTTs in force with the following territories, which generally provide reduced rates of WHT as follows:

Recipient WHT (%)
Dividends Interest Royalties
Non-treaty 20 20 20
Treaty:      
Botswana 5 (1)/7 10 10
Canada 15 15 15
China 5 10 5
Denmark 15 10 15
France The 1950 France - Zambia DTT is accepted to apply (3)
Finland 5 (1)/15 15 5 (1)/15
Germany 5 (1)/15 10 10
India 5 (1)/15 10 10
Ireland 7.5 10 8 (4)/10
Italy 5 (1)/15 10 10
Japan 0 10 10
Kenya 0 0 0
Mauritius 5 (1)/15 10 5
Netherlands 5 (2)/15 10 7.5
Norway 5 (1)/15 10 10
Seychelles 5 (1)/10 5 10
South Africa The 1953 Rhodesia & Nyasaland - South Africa DTT is accepted to apply (3)
Sweden 5 (1)/15 10 10
Switzerland The 1954 Switzerland - United Kingdom DTT is accepted to apply (3)
Tanzania 0 0 0
Uganda 0 0 0
United Kingdom 5 (5)/15 10 5

Notes

  1. The non-resident recipient must own at least 25% of the share capital of the capital of the Zambian company.
  2. The rate of 5% shall apply where the beneficial owner is a company that directly holds at least 10% of the capital of the company paying the dividends, or if the beneficial owner is a pension fund.
  3. These old treaties do not follow the OECD model, and, accordingly, their application to particular circumstances must be confirmed.
  4. The rate of 8% shall apply in the case of payment of royalties in respect of any copyright of scientific work, patent, trade mark, design or model, plan, secret formula or process, or information concerning industrial, commercial, or scientific experience.
  5. This rate applies where the dividends are paid out of income (including gains) derived directly or indirectly from immovable property within the meaning of Article 6 of the treaty.

In all cases, advance clearance must be obtained to obtain the treaty benefit and take advantage of any reduced rate of WHT or tax exemption.

It may be possible to obtain confirmation that management and consultancy fees can be paid without deduction of WHT by reference to the provisions of the relevant treaty. For treaties following the OECD model, the article concerning ‘Income Not Expressly Mentioned’ is generally taken to be relevant.