Withholding tax is not a tax but a means of collecting that tax. Withholding tax is deductible from a payment by the person who is liable to make the payment (the payer) at the point in time the person to whom it is due to be made (the payee) becomes legally entitled to it (date of accrual). The payer is required to pay the tax deductible to the Zambia Revenue Authority by reference to the date of accrual no matter how, when or where payment is made.

Payer – This refers to the person who is liable to make a payment and who is responsible for deducting and paying tax to the Zambia Revenue Authority. The tax is recoverable from the payer whether he makes the payment directly or through an agent e.g. a bank.

Payee – This refers to the person legally entitled to receive a payment.

Date of Accrual – The date on which the payee is legally entitled to claim payment whether paid or not. This is the date on which tax is deductible and determines the date by which the tax is payable to the Zambia Revenue Authority.

Withholding tax is deductible under the Income Tax Act from the following payments:

Withholding tax is also deductible from dividends and payments to non-resident contractors.