ZAMBIA Trends and Developments Contributed by: Mulenga Chiteba and Constance Namatai Mwango, Mulenga Mundashi Legal Practitioners
Mulenga Mundashi Legal Practitioners Plot 11058, First Floor Zimbabwe House Haile Selassie Avenue Long Acres PO Box 34072
Lusaka Zambia
Tel: +260 211 254248 / 254250 Fax: +260 211 254260 / 254266 Email: info@mmlp.co.zm Web: www.mmlp.co.zm
BEPS inclusive framework The OECD and G20 members are collaborat - ing with various jurisdictions to develop stand - ards on BEPS issues. This involves reviewing and monitoring the implementation of the entire BEPS package. Countries are free to join the BEPS framework, but they must commit to the comprehensive BEPS package and its imple - mentation. Members of the inclusive framework are required to implement the four minimum standards of the 15 BEPS Action Points, one of which is Action Point 13. BEPS Action 13, which is particularly significant, covers the country-by- country (CbC) reporting requirements. Accord - ing to the OECD’s 2021 Peer Review Report on CbC reporting, Zambia is lagging in implement - ing these requirements. Consequently, Zambia is actively taking measures to align with the frame - work’s recommendations. Measures Zambia is putting in place In 2020 and 2021, Zambia introduced Transfer Pricing Regulations to adopt the three-tiered approach to transfer pricing documentation, in line with the 2017 OECD Transfer Pricing Guide -
Transfer Pricing: Updates to Country-by- Country Reporting Regulations in Zambia Introduction Base Erosion and Profit Shifting (BEPS) are tax planning strategies used by multinational enterprises to exploit the gaps and mismatch - es in tax rules in order to avoid paying tax. In an effort to combat the effects of BEPS on the Zambian economy, the Zambian legislators have implemented certain tax initiatives to eliminate BEPS. Notably, the Income Tax (Transfer Pricing) (Amendment) Regulations Statutory Instruments No 117 of 2020 and No 107 of 2021 (the “Trans- fer Pricing Regulations” ) have provided a clear road map regarding country-by-country report - ing requirements in Zambia. The amendments have also harmonised the country-by-country reporting requirements with the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project, Action 13: Country-by-Country Reporting Imple - mentation Package. These requirements have been discussed in more detail below.
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