Zambia Investment Income Guide 2026
Investment income in Zambia is taxed primarily through withholding tax at source. Dividends paid to residents are subject to 15% WHT (final tax for individuals). Interest is taxed at 15% WHT for most sources. Royalties are taxed at 15% WHT. Capital gains on shares are subject to 10% CGT. Government securities may be exempt from tax in certain cases.
Dividend Taxation
Dividends paid by Zambian companies are subject to withholding tax at the following rates:
- Resident individuals: 15% WHT (final tax — dividends are not included in the PAYE return)
- Resident companies: 15% WHT (withholding tax is creditable against CIT)
- Non-residents: 15% WHT (subject to reduction under applicable DTAs)
For example, a resident individual receiving ZMW 10,000 in dividends receives ZMW 8,500 net, with ZMW 1,500 remitted to ZRA as final tax.
Interest Taxation
Interest income from various sources is subject to withholding tax as follows:
- Bank deposits: 15% WHT (final tax for individuals)
- Corporate bonds: 15% WHT
- Government securities: Interest on Zambian government bonds and Treasury bills may be exempt from tax
- Non-residents: 15% WHT (or lower treaty rate)
The withholding tax is deducted by the paying institution at the time interest is credited or paid.
Royalty Taxation
Royalties paid for the use of intellectual property, patents, trademarks, copyrights, and similar rights are subject to withholding tax at 15% for both residents and non-residents. Treaty relief may reduce this rate for non-residents. The withholding tax is a final tax for non-residents and creditable for resident companies.
Capital Gains on Securities
Capital gains from the sale of shares and securities are subject to 10% CGT. This applies to both listed and unlisted shares in Zambian companies. Gains from the sale of government securities may be exempt in certain circumstances. The gain is calculated as the selling price minus the acquisition cost and allowable incidental costs.
FAQs
Is rental income considered investment income?
No, rental income is classified as property income and is taxed under the PAYE system (see the rental income guide for details).
Are foreign dividends taxable in Zambia?
Zambian tax residents must declare foreign dividend income in their annual return. A foreign tax credit may be available for taxes paid in the source country.
Can I reclaim excess withholding tax?
Yes, if tax has been withheld at a rate higher than the applicable treaty rate, the taxpayer may apply to ZRA for a refund via the TaxOnline portal.
Disclaimer
This guide is for informational purposes only and does not constitute tax advice. Consult a qualified Zambian tax professional for advice specific to your circumstances.