Zambia Personal Income Tax

Residents are subject to income tax on income derived, or deemed to be derived, from a source in Zambia.

Nonresidents are subject to withholding taxes only.

A person who lives and works in Zambia for more than 183 days in a tax year is considered resident for tax purposes.

Income subject to tax

Employment income. All salaries paid and benefits given in con­sideration for work performed in Zambia, regardless of where paid, are subject to tax in Zambia. Employers are subject to tax on certain benefits they provide, including accommodation and the personal use of a company vehicle.

Self-employment and business income. Any individual who earns income from a source or a deemed source in Zambia is subject to tax for the year in which the income is earned. Partners are subject to tax individually on their respective shares of partner­ship income.

Business income for tax purposes includes all profits and gains, except capital gains, arising from a business.

Nonresidents are subject to withholding tax at a rate of 20% on income from management and consulting fees.

Effective from 1 January 2016, resident individuals are subject to withholding tax on management and consultancy fees at a rate of 15%.

Directors’ fees. Directors’ fees received from resident companies are included in taxable income.

Investment income. Resident individual shareholders are subject to withholding tax on dividends at a rate of 15%. This is a final tax.

The withholding tax rate is 0% for interest earned by resident and nonresident individuals on deposit accounts in financial institu­tions including building societies.

Nonresidents are subject to withholding tax at a rate of 20% on royalties.

Capital gains. Capital gains tax is not levied in Zambia. However, before property may be transferred, Property Transfer Tax (PTT) is levied at a rate of 5%, on the realizable value of property. For purposes of PTT, property consists of land in Zambia, which includes buildings, structures and other improvements, and shares issued by companies incorporated in Zambia. PTT at a rate of 10% is imposed on the sale or transfer of mining rights or inter­ests in such rights.

Deductions

Personal exemption. Individuals are exempt from tax on the first ZMW36,000 of their annual income.

Business deductions. Expenses (except for capital expenses) incurred in earning taxable income are deductible.

Rates. The following income tax rates apply to individuals.

Taxable income

Exceeding (ZMW) Not exceeding (ZMW) Rate (%)
0 36,000 0
36,000 45,600 25
45,600 70,800 30
70,800 35

Relief for losses. Losses may be carried forward for up to five years and deducted from income from a similar source.

Estate and gift taxes

Zambia does not impose estate or gift tax.

Social security

All employees must contribute 5% of their gross salary to the National Pensions Scheme Authority. Employers must match the employee contributions.

Tax filing and payment procedures

The tax year-end is 31 December. Returns must be filed by 30 June following the tax year-end.

Employers must withhold taxes from remuneration under the Pay-As-You-Earn (PAYE) system and remit the taxes monthly to the Zambia Revenue Authority by the 14th day of each month.

Individuals with business or self-employment income must pay estimated taxes in quarterly installments by the following dates:

  • First quarter: 14 April
  • Second quarter: 14 July
  • Third quarter: 14 October
  • Fourth quarter: 14 January

Penalties are imposed for late filing and late payment of taxes.

Tax treaties

Zambia has entered into double tax treaties with the following countries.

Belgium Ireland Romania
Canada Italy South Africa
Denmark Japan Sweden
Finland Kenya Switzerland
France Mauritius Tanzania
Germany Netherlands Uganda
India Norway United Kingdom

Temporary visas

Foreign nationals must possess visas to enter Zambia unless they are nationals of certain British Commonwealth countries or countries with which Zambia has signed visa-waiver agreements. Although certain categories of visitors are automatically granted entry visas at ports of entry, others must obtain visas prior to their arrival in Zambia. Transit, tourist/business, re-entry and other short-term visas are available for foreign nationals visiting Zambia.

Transit visas are granted to foreign nationals wishing to travel through Zambia en route to destinations outside the country. To obtain transit visas, foreign nationals must prove that they will be admitted to their destination outside the country and must be in possession of tickets to such destination. A transit visa is valid for a maximum period of seven days.

Tourist and business visas are issued to foreign nationals intend­ing to visit Zambia for recreational purposes or to do business in the country without taking up employment. A tourist visa is valid for a cumulative total of 90 days in a 12-month calendar period. A business visa is valid for a cumulative total of 30 days in a 12-month calendar period. Foreign nationals who exhaust these validity periods and who still have unfinished business in Zambia may obtain temporary permits for a prescribed fee.

Entry visas may be single or multiple entry. Visitors wishing to leave Zambia and then return must obtain re-entry visas.

Visas generally are issued upon payment of a certain specified fee. Details of fees and a list of countries whose citizens are subject to these fees are available at Zambian diplomatic missions.

Zambia does not grant permanent visitor permits or permanent work permits.

Work and investors’ permits

Work permits. Foreign nationals must possess work permits to engage in paid employment with a Zambian employer. Zambia does not have quotas limiting the number of foreign nationals employers may engage.

Applicants must submit the following documents to the Director General of Immigration:

  • A completed application form
  • A firm offer of employment (an employment contract)
  • A letter from the prospective employer
  • A certified copy of professional qualifications
  • Certified copies of the relevant passport pages
  • A police clearance certificate from the applicant’s country of permanent residence
  • Two passport-size photographs

The application for a work permit is processed and issued while the applicant is outside Zambia. All applicants must submit pre­scribed forms and fees before consideration by the Zambia authorities.

Work permits in conjunction with a work contract are granted for a minimum period of two years.

Holders of work permits do not need to obtain separate residence permits.

Investors’ permits. Foreign nationals investing in Zambia must possess investors’ permits. These permits may be obtained through the submission of the following documents to the Director General of Immigration:

  • A completed application form, accompanied by the company’s certificate of incorporation
  • A list of directors
  • Investment license (if applicable) or a certificate of registration
  • Copies of the relevant passport pages

Investors’ permits may be issued while the applicant is in Zambia. A fee is required for investors’ permits.

Residence permits

Long-term entry permits (residence permits) issued for periods exceeding three years are available for certain categories of per­sons, including foreign investors holding investors’ permits (see Section G). A long-term entry permit allows the holder to re main in Zambia indefinitely, as long as the holder continues to meet the conditions specified by the permit.

Foreign nationals who hold long-term entry permits may apply for Zambian citizenship after residence in Zambia for 10 years.

Family and personal considerations

Family members. The spouses of holders of work, self-employment and entry permits, as well as their children under 18 years of age, enjoy the same status as the principal permit holders. They do not need to apply for separate visas.

Marital property regime. Zambia does not have a community property or similar marital property regime and does not enforce community property claims brought between couples who estab­lish a marital domicile in Zambia.

Forced heirship. Zambia applies a type of forced heirship rule at the discretion of the court if the deceased does not provide ade­quately for his or her surviving spouse, parent or child or dies intestate.

Driver’s permits. Foreign nationals may drive legally with their home country driver’s licenses for the first 90 days after their arrival in Zambia. On expiration of the 90-day period, they must apply for a Zambian driver’s license. To obtain a Zambian driver’s license, the applicant must take a driving test.