ZAMBIA Law and Practice Contributed by: Mulenga Chiteba, Constance Namatai Mwango and Bwalya Milunga, Mulenga Mundashi Legal Practitioners
• the exclusive or non-exclusive character of the rights transferred; and • whether the transferee has the right to participate in further developments of the intangible property by the transferor. 4.2 Hard-to-Value Intangibles Zambia does not have any special rules regarding hard-to-value intangibles. 4.3 Cost Sharing/Cost Contribution Arrangements The Transfer Pricing Rules recognise cost contribu - tion arrangements and define them as arrangements among persons to: • share the costs and risks of developing, producing or obtaining assets, services or rights; and • determine the nature and extent of the interests of each participant in the results of the activity of developing, producing or obtaining the assets, services or rights. There are no special rules that apply to these types of arrangements. 5. Adjustments 5.1 Upward Transfer Pricing Adjustments A taxpayer may make an adjustment where the con - ditions of an actual transaction differ from the arm’s length principle requirements. The taxpayer may make the relevant adjustment in the calculation of assess - able income included in the annual tax return. Gener - ally, year-end adjustments are permitted before filing of the income tax return for the relevant financial year. 5.2 Secondary Transfer Pricing Adjustments Zambia does not currently have specific rules con - cerning secondary adjustments. 6. Cross-Border Information Sharing 6.1 Sharing Taxpayer Information Zambia has signed 23 tax treaties which provide for exchange of information agreements.
Further, it has signed the ATAF Agreement on Mutual Assistance in Tax Matters which established exchange of information and assistance in tax collection among the contracting countries in Africa. While Zambia has international agreements which provide for exchange of information, this is not suf - ficient for country-by-country (CbC) reporting purpos - es. Zambia has not yet implemented the Qualifying Competent Authority Agreements (QCAA) which gov - ern the automatic exchange of CbC reports filed on an annual basis between party jurisdictions and between authorised representatives of those jurisdictions that are parties to an international agreement. 6.2 Joint Audits Joint audits are not applicable in Zambia. Presently, the tax authorities significantly address transfer pric - Zambia participates in the OECD Inclusive Framework on BEPS, which promotes international co-operation on tax matters; however, Zambia does not currently operate a formal simultaneous audit or joint audit programme, nor is such a mechanism embedded in domestic tax legislation or supported through specific bilateral arrangements. In practice, Zambia continues to rely on unilateral audits, where the Zambia Revenue Authority (ZRA) deals directly with the taxpayer rather than conducting co-ordinated or parallel examinations with foreign tax authorities. Furthermore, there is no statutory or regulatory frame - work in Zambia that provides for simultaneous tax examinations or joint audits with other jurisdictions. Likewise, no enhanced co-operation programmes tai - lored specifically to simultaneous controls are in place. Zambia has invested in strengthening its transfer pric - ing audit capabilities – particularly in the mining sec - tor – and its membership in the Inclusive Framework enables the possibility of spontaneous or requested exchange of information with other tax administra - tions on transfer pricing issues. ing issues in the mining sector. 6.3 Simultaneous Controls In the context of a transfer pricing audit, communica - tion flows directly between the taxpayer and the ZRA. The ZRA issues formal written requests for informa -
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