Preferential income tax rate

  • All companies investing in the following sectors benefit from an unconditional reduction of the corporate income tax rate (regardless of the amount invested)

Source: Zambia Development Agency, PWC, KPMG

Tax incentives under the ZDA act

  • The Zambia Development Agency (ZDA) act and subsequent amendments define extra tax incentives.
  • The following incentives apply to investors investing at least USD 500,000 in a priority sector and registered with the Zambia Development Agency

Source: Zambia Development Agency, PWC

  • Priority sectors are the following
Priority sector Special areas Construction & establishment of infrastructure Energy & water development Water supply
Conditions Activities located in Multi-facility Economic Zones, Industrial Parks or rural areas. Area excluded: renovation, expansion and refurbishment.

Education: construction of education and skills training institutions.

Health: construction of health centers’ (as defined under the Health Professions Act 2009).

Tourism: construction and establishment of hotels, convention centers, exhibition centers, museums, theme parks, art galleries, theatres, large retail complex containing a variety of ten or more stores, restaurants or other business establishments housed in a series of connected or adjacent buildings or in a single large building.

Housing: development of at least 50 houses (i) erected or (ii) maintained under one management or control on land developed specifically for the citing of such houses in accordance with a comprehensive plan which provides for the laying out of roads and the furnishing and availability of services essential or ancillary to the use of such building as houses.

Agriculture: construction of crop and grain storage facilities.

Power: building, installation of power stations.

Fuel: (a) building and installation of processing and refinery plants for bio-fuel, (b) construction of petroleum refineries, pipelines, rural filing stations.

Construction of depots, dams, irrigation canals, water and sewerage treatment plants.

Source: Zambia’s Investors Guide Handbook

 

Specific tax incentives applicable to the mining sector

  • Mining operations also benefit from specific tax incentives. 
  • Main benefits granted are the following

 


Source: Zambia Development Agency, PWC

Double tax treaties

  • On top of national tax incentives, foreign companies can also benefit from a reduced tax burden by taking advantage of double taxation agreements.