ZAMBIA Law and Practice Contributed by: Mulenga Chiteba, Constance Namatai Mwango and Bwalya Milunga, Mulenga Mundashi Legal Practitioners
7.7 Duration of APA Cover See 7.1 Programmes Allowing for Rulings Regarding Transfer Pricing , as the duration of APA cover is not applicable in Zambia. 7.8 Retroactive Effect for APAs This is not applicable in Zambia. See 7.1 Programmes Allowing for Rulings Regarding Transfer Pricing . 8. Penalties and Documentation 8.1 Transfer Pricing Penalties and Defences The Transfer Pricing Rules provide that failure to main - tain the required transfer pricing documentation or make transfer pricing information available to the ZRA when required to do so may render the entity liable to pay a fine not exceeding ZMW40,000 or to imprison - ment for a term not exceeding 12 months, or to both. Although the fine is capped at ZMW40,000, interest is always charged on debts owed to the ZRA and there is no cap on the interest that accrues on such debts. Interest is charged at the Bank of Zambia discount rate plus 2% per annum. The Income Tax Act also states that the Transfer Pricing Regulations may cre - ate offences which will render an entity liable to pay a fine not exceeding ZMW32 million; however, presently the Transfer Pricing Regulations do not contain penal - ties and provide that the penalties under the Income Tax Act are applicable. The Transfer Pricing Rules further provide that a tax - payer is required to provide transfer pricing docu - mentation to the ZRA within 30 days from the date of receiving the request for documentation. In addi - tion, where the ZRA serves a taxpayer with a notice of assessment, the taxpayer may within 30 days of the date of said service object to the assessment by way of written statement addressed to the Commissioner- General of the ZRA, setting out the grounds of objec - tion. If the taxpayer is dissatisfied with the outcome of the Commissioner-General’s decision concerning the objection to the assessment, the taxpayer may, within 30 days of the date of being served written notice of this decision, appeal against the assessment to the Tax Appeals Tribunal (the “Tribunal”).
tion or documentation, which taxpayers must ordinar - ily provide within 30 days, and maintains an active dialogue through meetings, follow-up queries, and requests for clarification. Taxpayers are also obligated to supply information held by foreign associated per - sons, effectively ensuring that cross-border commu - nication occurs indirectly through the taxpayer, even though no direct inter-administration audit mechanism exists. 6.4 International Compliance Assessment Programme (ICAP) Zambia is not currently participating in the OECD International Compliance Assurance Programme (ICAP) or any comparable multilateral risk‑assessment programme. 7. Advance Pricing Agreements (APAs) 7.1 Programmes Allowing for Rulings Regarding Transfer Pricing Zambia does not have advance pricing agreements (APAs), and these are not expected in the near future given that transfer pricing audits are still in their early stages. 7.2 Administration of Programmes This is not applicable in Zambia. See 7.1 Programmes Allowing for Rulings Regarding Transfer Pricing . 7.3 Co-Ordination Between the APA Process and Mutual Agreement Procedures This is not applicable in Zambia. See 7.1 Programmes Allowing for Rulings Regarding Transfer Pricing . 7.4 Limits on Taxpayers/Transactions Eligible for an APA See 7.1 Programmes Allowing for Rulings Regarding Transfer Pricing . 7.5 APA Application Deadlines See 7.1 Programmes Allowing for Rulings Regarding Transfer Pricing . 7.6 APA User Fees This is not applicable in Zambia. See 7.1 Programmes Allowing for Rulings Regarding Transfer Pricing .
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