ZAMBIA Law and Practice Contributed by: Mulenga Chiteba, Constance Namatai Mwango and Bwalya Milunga, Mulenga Mundashi Legal Practitioners
6.2 Joint Audits Joint audits are not applicable in Zambia. Pres - ently, the tax authorities significantly address transfer pricing issues in the mining sector. 7. Advance Pricing Agreements (APAs) 7.1 Programmes Allowing for Rulings Regarding Transfer Pricing Zambia does not have advance pricing agree - ments (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 Pro- grammes 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 Pro- grammes 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 Pro- grammes Allowing for Rulings Regarding Transfer Pricing .
7.7 Duration of APA Cover See 7.1 Programmes Allowing for Rulings Regarding Transfer Pricing , as this is not appli - cable in Zambia. 7.8 Retroactive Effect for APAs This is not applicable in Zambia. See 7.1 Pro- grammes 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 maintain the required transfer pricing docu - mentation or make transfer pricing information available to the ZRA when required to do so may render the entity liable to pay a fine not exceed - ing ZMW40,000 or to imprisonment for a term not exceeding 12 months, or to both. Although the fine is capped at ZMW40,000, inter - est 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 Pric - ing Regulations may create offences which will render an entity liable to pay a fine not exceeding ZMW32 million; however, presently the Transfer Pricing Regulations do not contain penalties and provide that the penalties under the Income Tax Act are applicable. The Transfer Pricing Rules further provide that a taxpayer is required to provide transfer pricing documentation to the ZRA within 30 days from the date of receiving the request for documenta - tion. In addition, where the ZRA serves a taxpay - er with a notice of assessment, the taxpayer may
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