Resident entities are taxed on income received or accrued from an actual or deemed source within Zambia, as well as on interest and dividends from a source outside Zambia.

Income is deemed to be derived from Zambia if it:

Arises under any agreement made in Zambia for sale of goods, irrespective of whether those goods have been or are to be delivered in Zambia;
Is remuneration from employment exercised or office held in Zambia or if it is received by virtue of any service rendered or work or labor done by a person or partnership carrying on any business in Zambia, irrespective of whether payment is made outside Zambia or by a person resident outside Zambia;
Is remuneration for services rendered outside Zambia to the Zambian Government or any statutory corporation if the person rendering the services is resident outside Zambia solely for that purpose;
Is a pension granted by a person wherever resident, irrespective of where the funds from which it is paid are situated, or where payment is made, except where the employment or office for which the pension is granted was wholly outside Zambia, and the emoluments were never charged to tax in Zambia;
Arises from interest incurred in the production of income or in the carrying on of a business in Zambia or paid directly or indirectly out of funds derived from within Zambia;
Arises from a royalty incurred in the production of income or in the carrying on of a business in Zambia or paid directly or indirectly out of funds derived from within Zambia;
Arises from the carriage, by a person who is not resident in Zambia, of passengers, mails, livestock or goods embarked, shipped or loaded in Zambia other than passengers embarking in transit through Zambia or mails, livestock or goods shipped or loaded on transshipment through Zambia;
Is income earned by a person resident in Zambia from the carriage of persons, mail, livestock, or any other goods shipped or loaded outside Zambia to other destinations outside Zambia;
Arises from a management or consultant fee incurred in the production of income or the carrying on of a business in Zambia and is received by a person or persons in partnership for a service other than such part thereof as is rendered by the person or persons in partnership in the carrying on of a business in Zambia;
Arises from a commission incurred in the production of income or in the carrying on of a business in Zambia, or paid directly or indirectly out of funds derived from within Zambia;
Arises from a business that is carried on partly within and partly outside Zambia by a person resident in Zambia, or where such a person receives a share of the profits of a business carried on in partnership partly within and partly outside Zambia, the whole of the person's share of the profits of the business or partnership is deemed to have been received from a source within Zambia; or
Arises from the indirect transfer of Zambian assets, notably through the transfer of shares in a foreign entity that holds a direct or indirect interest of 10% or more in a Zambian entity (see Sec. 8.2.1.).

There is no capital gains tax in Zambia. However, a Property Transfer Tax (PTT) is levied on sale or deemed sale of immovable property and shares (see Sec. 8.2.1.).

Dividend income received by a resident company from another resident company is subject to withholding tax. Dividend income received by a resident company from sources outside Zambia is subject to tax as a separate source.

Interest income received by a resident company from sources within and outside Zambia is subject to tax as a separate source.

Foreign exchange gains and losses which are revenue in nature are generally recognized only on the date of payment of the debt or settlement of the transaction. However, the deduction is allowed in respect of foreign exchange losses of a capital nature incurred on loans in relation to the construction of industrial or commercial buildings. Unrealized gains and losses are not taxable/ deductible for tax purposes.

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