Unlocking the intricacies of transfer pricing (TP) regulations in Zambia is akin to understanding financial strategy and compliance.

Embedded in Sections 97A and 97D of the Income Tax Act (ITA), these rules govern controlled transactions within and beyond Zambia’s borders, adding a layer of complexity for businesses navigating the local tax landscape. Businesses must meticulously prepare and maintain TP documentation, with multinational enterprises (MNEs) facing additional requirements for standalone TP reports for each entity.

For entities with robust turnovers, compliance is crucial, and failure to adhere to the rules can result in significant penalties. The Zambian Revenue Authority's (ZRA) audit program focuses on specific sectors, such as mining companies and distributors, adding further pressure.

Zambia has adopted the OECD TP Guidelines July 2017 recommendations, aligning the approved TP methods with international standards. Self-assessment is key, as there is no formal Advance Pricing Agreements (APA) program in place. Navigating these regulations is akin to performing a carefully orchestrated dance, and businesses must ensure their TP strategies are in harmony with the Zambian tax landscape to avoid potential penalties and challenges.  

For a comprehensive overview of the transfer pricing landscape in African countries and detailed insights, download the full Grant Thornton Africa Transfer Pricing Landscape Guide 2023/2024.