Zambia Corporate Tax Guide 2026 — CIT 30% Standard, 35% Mining

Q: Can a foreign company register a subsidiary in Zambia?

Yes. Foreign companies can register a private limited company with PACRA with no restrictions on foreign ownership.

Q: Is there a withholding tax on dividends paid by a Zambian company?

Yes. Dividends are subject to 15% withholding tax, which is a final tax for resident shareholders.

Zambia's Corporate Income Tax (CIT) is 30% for standard companies, 35% for mining companies, 15% for agriculture/farming, and 25% for companies newly listed on the Lusaka Securities Exchange (LuSE). The tax year is the calendar year.

CIT applies to all companies resident in Zambia and to non-resident companies with a permanent establishment in Zambia. Zambia taxes both resident and non-resident companies on income derived from Zambian sources. The tax authority is the Zambia Revenue Authority (ZRA). Companies must register for tax, file annual returns, and make advance payments.

Example: A services company in Lusaka earns ZMW 5M in net profit. CIT due: ZMW 1.5M (30% of ZMW 5M). If it is a farming company, CIT would be ZMW 750,000 (15%).

CIT Rates by Sector

Standard rate: 30% on net taxable profit for most companies
Mining: 35% for mining companies (with additional mineral royalty taxes)
Agriculture / Farming: 15% for agricultural production and farming businesses
Newly listed companies: 25% for companies newly listed on the LuSE (for a specified period)
Non-resident companies: 30% on Zambian-source income (via permanent establishment or withholding)

Taxable Income and Deductions

Taxable income is calculated as gross revenue minus allowable deductions. Key deductions include:

Operating expenses: Rent, salaries, utilities, supplies, and other business costs
Depreciation: Industrial buildings (5% per year), plant and machinery (25%), vehicles (20%), computers (33.3%)
Interest expense: Deductible on loans used for business purposes (subject to thin capitalisation rules)
Employee costs: Salaries, bonuses, NAPSA, NHIMA contributions, and other employment costs
Tax losses: Can be carried forward for up to 5 years. No carryback.
Capital allowances: Investment incentives including farming and mining allowances

Tax Compliance

Companies must file an annual CIT return by April 30 of the following year. Advance payments are made quarterly based on estimated annual tax. VAT returns are filed monthly or quarterly. The ZRA requires electronic filing through the TaxOnline portal. Companies must maintain proper accounting records for at least 6 years.

FAQs

Can a foreign company register a subsidiary in Zambia?

Yes. Foreign companies can register a subsidiary (private limited company) with PACRA. Minimum 1 shareholder and 1 director. No restrictions on foreign ownership in most sectors.

Is there a withholding tax on dividends paid by a Zambian company?

Yes. Dividends paid by a Zambian company are subject to 15% withholding tax. This is a final tax for resident shareholders. Non-residents may be subject to treaty-reduced rates.

What is the mining tax regime?

Mining companies pay CIT at 35% plus a mineral royalty tax ranging from 4% to 10% depending on the mineral and gross value. Additional variable profit tax may apply to highly profitable mines.

Disclaimer

This guide is for informational purposes only and does not constitute tax advice. Corporate tax planning requires professional advice. Consult a qualified Zambian accountant for advice tailored to your business.