Zambia Inks Double Taxation Agreement on Income with Switzerland

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In a move to create legal certainty conducive to the further development of economic ties between them, Zambia and Switzerland have signed a new double taxation agreement (DTA) in taxes on income.

Double taxation is a taxation principle referring to income taxes paid twice, in two different countries, on the same source of earned income.

The DTA makes provision for dividends being taxed at source at a maximum rate of 15 percent and qualified participants being taxed at no more than 5 percent.

With regard to interest, withholding tax rate is 10 per cent and for taxes, the rate is 5 percent.

The agreement replaces one between Switzerland and the United Kingdom of 1954 which previously applied to Switzerland and Zambia.

It also contains an abuse clause to combat base erosion and profit shifting as well as an arbitration clause that will increase for legal certainty taxpayers.

The DTA which is awaiting approval by Switzerland’s Parliament also contains an administrative assistance clause in accordance with the current international standard for the exchange of information upon request

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