CHAPTER 323 - INCOME TAX ACT: SUBSIDIARY LEGISLATION

INDEX TO SUBSIDIARY LEGISLATION

Tax Appeal Court Regulation

Income Tax (Job Credits) Regulations

Income Tax (Low-Cost Housing) Notice

Income Tax (Petroleum Operations) Regulations

Income Tax (Zambia Appointment Limited Employees) (Exemption Approval) Order

Income Tax (Fund Investment Services Limited) (Approval and Exemption) Order

Income Tax (Zambia Venture Capital Fund Limited) (Approval and Exemption) Order

Income Tax (Foreign Organisations) (Approval and Exemption) Order

Income Tax (Pay as You Earn) Regulations, 2014

Income Tax (European Investment Bank) (Approval and Exemption) Order, 2014

Double Taxation Relief (Taxes on Income) (Republic of Finland) Order

Convention for the Avoidance of Double Taxation - France

Double Taxation Relief (Taxes on Income) (United Kingdom) Order

Double Taxation Relief (Taxes on Income) (Ireland) Order

Convention for the Avoidance of Double Taxation - Holland

Double Taxation Relief (Taxes on Income) (Norway) Order

Convention for the Avoidance of Double Taxation - Sweden

Convention for the Avoidance of Double Taxation - Switzerland

Double Taxation Relief (Taxes on Income) (India) Order

Double Taxation Relief (Taxes on Income) (Kingdom of Denmark) Order

Double Taxation Relief (Taxes on Income) (Italy) Order

Double Taxation Relief (Taxes on Income) (Republic of Germany) Order

Convention Between the Government of the Republic of Zambia and the Government of the Republic of Kenya for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income

Agreement for the Avoidance of Double Taxation - South Africa

Convention Between the Government of the Republic of Zambia and the Government of the United Republic of Tanzania for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income

Convention Between the Government of the Republic of Zambia and the Government of the Republic of Uganda for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income

Convention Between the Government of the Republic of Zambia and Japan for the Avoidance of Double Taxation with Respect to Taxes on Income

Income Tax (Suspension of Tax) Order

Income Tax (Fund Investment Services Limited) (Approval And Exemption) Order

Income Tax (Zambia Venture Capital Fund Limited) (Approval And Exemption) Order

Income Tax (Foreign Organisations) (Approval And Exemption) Order

Income Tax (Securities And Exchange Commission) (Approval And Exemption) Order

Income Tax Act (Foreign Exemptions) Order

Income Tax (Foreign Organisations) (Exemption And Approval) Order

Income Tax (Body Corporate) (Exemption And Approval) Order

Income Tax (Transfer Pricing) Regulations

Income Tax (Foreign Organisations) (Approval And Exemption) Order

Income Tax (Foreign Organisation)(Approval And Exemption) Order

Income Tax (Tax Clearance) (Exemption) Regulations

Income Tax (Advance Tax) (Exemption) Regulation

Income Tax (Foreign Personnel) (Approval And Exemption) Order

Income Tax (Foreign Personnel) (Approval And Exemption) Order

Income Tax (Foreign Organisations) (Approval And Exemption)Order

Income Tax (Turnover Tax) Regulations

Income Tax (Tazama Petroleum Products Company Limited) (Approval And Exemption) Order

Income Tax (Double Taxation Relief) (Taxes On Income) (People's Republic Of China) Order

Income Tax (Tax Clearance) (Exemption) Regulations

Income Tax (China-Africa Development Fund) (Approval And Exemption) Order

Income Tax (Foreign Personnel) (Approval And Exemption) Order

Income Tax (Secretariat of The International Conference On The Great Lakes Region Centre) (Approval And Exemption) Order

Income Tax (Foreign Personnel) (Approval And Exemption) (No.) Order

Income Tax (Double Taxation Relief) (Taxes On Income) (Republic Of Mauritius) Order

Income Tax (Double Taxation Relief) (Taxes On Income) (Republic Of Seychelles) Order

TAX APPEAL COURT REGULATIONS

[Sections 9 and 107]

[Currency mentioned in this regulation should be re-denominated as stipulated under S 4 of Re-denomination Act, 2012, read with S 29 of Bank of Zambia Act, 1996.]

Arrangement of Regulations

   Regulation

   1.   Title

   2.   Interpretation

   3.   Registrar of Court

   4.   Registrar to notify address for service

   5.   Place and sittings of Court

   6.   Member of Court barred by vested interest

   7.   Practice and Procedure

   8.   Notice of Appeal

   9.   Memorandum of Appeal

   10.   Withdrawal of Appeal

   11.   Appellant to appear at hearing and procedure on non-attendance

   12.   Procedure on hearing

   13.   Decision to be set forth in an orders

   14.   Costs and fees

   15.   Adjournment

   16.   Admissibility of certain evidence

   17.   Power to summon witnesses and order production of documents

   18.   —

      SCHEDULE

[Regulations by the Minister]

[Revised as a Consequence of the Amendments to Section 107 of the Act to fit into the application of the Law]

SI 126 of 1973.

1.   Title

These Regulations may be cited as the Tax Appeal Court Regulations.

2.   Interpretation

In these Regulations unless the context otherwise requires—

“Appellant” means a person who under the Act has the right to appeal to the court and includes a legal practitioner or agent acting on his behalf;

“Chairman” means the Chairman of the Court appointed under section 107 of the Act and Deputy Chairman or Special Chairman shall be construed accordingly;

“Commissioner-General” means the Commissioner-General of the Zambia Revenue Authority;

“Registrar” means an Officer of the Court appointed under sub-section (8) of section 107 of the Act and Deputy Registrar shall be construed accordingly.

3.   Registrar of Court

   (1) The Registrar of the Court shall be the Chief Administrative Officer of the Court and shall in that capacity issue documents and accept service on behalf of the court.

   (2) The Commissioner-General shall appoint such officers as may be necessary for the performance of the functions of the court.

4.   Registrar to notify address for service

   (1) The Registrar of the Court shall by Gazette notice notify his address for service of documents for the purposes of these Regulations and in his capacity as Registrar shall comply with the general and special directions of the court and the Chairman.

   (2) The Registrar shall attend sittings of the court but shall not take part in the deliberations and consideration of the decisions of the court.

5.   Place and sittings of Court

   (1) The court shall sit in such place or places as may be appointed by the Chairman.

   (2) The date of hearing of any appeal shall be determined by the Chairman and notice thereof shall be published by him in the Gazette at least one month prior to that date.

6.   Member of Court barred by vested interest

A member of the court shall not sit as member, chairman or registrar if he has any interest, direct or indirect, personal or pecuniary in any matter before the court.

7.   Practice and Procedure

The court shall, subject to the provisions of the Act and these regulations determine its own procedure.

8.   Notice of Appeal

Every Notice of Appeal to the court under section 109 of the Act shall be in duplicate and shall contain an address for service of notices or documents.

9.   Memorandum of Appeal

   (1) An appellant shall, within fourteen days after the date on which he gave written notice of appeal to the Commissioner in accordance with sub-section (1) of section 109 of the Act, serve on the Registrar a memorandum of appeal in quadruplicate, accompanied by the copies of the documents and the statement of facts required by sub-regulation (3) of this Regulation.

   (2) The Memorandum of Appeal shall be signed by the Appellant and shall set forth concisely each ground of appeal, without any argument or narrative, in separate paragraphs and the paragraphs shall be numbered consecutively.

   (3) The Memorandum of Appeal shall be accompanied by—

      (a)   three copies of the assessment appealed against and of the written notice of the decision given by the Commissioner-General under section 108 of the Act; and

      (b)   three copies of the written notice of appeal; and

      (c)   a statement of facts in quadruplicate, signed by the appellant setting forth the facts on which the appeal is based and referring therein to any documentary or other evidence which the appellant proposes to adduce at the hearing of the appeal.

   (4) Upon being served with the memorandum of appeal documents and a statement of facts in pursuance of sub-regulation (1), the Registrar shall transmit one memorandum of appeal and one statement of facts to the Commissioner-General.

10.   Withdrawal of Appeal

The Appellant may, at any time before the appeal is called for hearing withdraw any appeal by serving a written notice to that effect on the Commissioner-General and the Registrar of the court.

11.   Appellant to appear at hearing and procedure on non-attendance

   (1) Every person who has appealed to the court shall appear in person or by a legal practitioner or agent on his behalf at the place, date and time fixed for the hearing of the appeal.

   (2) Notwithstanding the provisions of sub-regulation (1), where at the place, date and time fixed for the hearing of an appeal by the court there is no appearance for the appellant, the court may hear and determine the appeal in the absence of the appellant.

12.   Procedure on hearing

On the hearing and determination of an appeal by the court, the procedure shall be in accordance with the following provisions:

      (a)   the appellant shall state the grounds of the appeal and may adduce any relevant evidence in support thereof;

      (b)   save with the consent of the court and upon such terms as the court may determine—

      (i)   the appellant shall not rely at the hearing on any ground of appeal other than those set forth in the memorandum of appeal; or

      (ii)   the appellant shall not adduce any evidence other than the evidence previously adduced to the Commissioner-General;

      (c)   at the conclusion of such statement and evidence, if any, the Commissioner-General shall be entitled to make his submissions and adduce any relevant evidence in support of his case;

      (d)   the appellant shall be entitled to reply to the submissions made and evidence adduced by the Commissioner-General but in his reply the appellant shall not introduce or rely on any ground of appeal or evidence not before the court;

      (e)   a witness called and examined by any party may be cross-examined by the other party to the appeal and, if so cross-examined, may be re-examined;

      (f)   a witness called and examined by the court may be cross-examined by any party to the appeal;

      (g)   the chairman or a member of the court shall be entitled at any stage of the hearing to ask such questions of the appellant or the Commissioner-General or any witness as he considers necessary for the determination of the appeal;

      (h)   before the court considers its decision, the parties to the appeal shall withdraw from the sitting and thereupon, unless the court adjourns to consider its decision, the court shall deliberate and consider its decision according to law;

      (i)   a record of all proceedings of the sitting, except the deliberations and consideration of the decision by the court, shall be kept and the decision of the court shall be recorded therein.

13.   Decision to be set forth in an order

The court shall, within seven days after the date on which it gives its decision, issue an order setting forth its decision and the grounds thereof and the date thereof, and the order shall thereupon be served on the Commissioner-General and the person who appealed.

14.   Costs and fees

   (1) On the hearing and determination of an appeal or any proceedings preliminary or incidental thereto, no fees shall be payable and costs shall not be allowed on either side save as may be allowed under sub-regulation (2) or ordered under regulation 17.

   (2) When, on the dismissal of an appeal, the court is of the opinion that an appeal was vexatious or frivolous, it may order the person who appealed to pay to the Commissioner- General such costs, not exceeding five hundred thousand kwacha as the court may determine.

15.   Adjournment

The court shall have power at any time to postpone or adjourn the hearing or determination of any appeal before it from time to time and on such terms, including any order as to costs, as it may determine.

16.   Admissibility of certain evidence

Subject to the provisions of these Regulations, the court may admit any evidence adduced which is relevant to a question in issue, whether oral or documentary, and whether or not it is admissible under any law relating to the admissibility of evidence.

17.   Power to summon witnesses and order production of documents

The court may, by notice in writing, require any person to appear before it to be examined and such person may be examined on any matter in question on the appeal, and may, by the same or a separate notice in writing, require any person to produce any book document or other record which may be in his possession or under his control relating to any such matter.

18.   —

Either party to an Appeal may appeal to the High Court from the decision of the court on any question of law or a question of mixed law and fact but not on a question of fact alone.

SCHEDULE

[Regulation 5]

Date.......................................

Chairman,

Tax Appeal court,

P.O. Box

......................................................

NOTICE OF APPEAL

INCOME TAX ACT

[Section 109]

Name of Taxpayer……………………………………………………………………………………………………

Income Tax Charge Year ended 31st March, 19..........................................................................................................

*Assessment No.

*Date of Issue

*Determination dated…………………………………………………………………………………………………

Being dissatisfied with the Commissioner-General's decision under the Income Tax Act, on the objection to the *assessment/determination details of which are given above an appeal is hereby made under section 109 of the Income Tax Act against the *assessment/determination on the following grounds:

The Commissioner-General's address for service is:

…………………………………………………………………………………………………………………………

Signature………………………………………

(Appellant or Agent)

Address for service:

……………………………………………………………………

*Delete whichever is inappropriate.

†Enter address on assessment or determination.

INCOME TAX (JOB CREDITS) REGULATIONS

[Section 90A]

Arrangement of Paragraphs

   Paragraph

   1.   Title

   2.   Interpretation

   3.   Rates of job credits

   4.   Job credits to partnerships

   5.   Excess of job credits not to be carried forward

   6.   Job credits to be given once in respect of same employee

[Regulations by the Minister]

SI 111 of 1986.

1.   Title

These Regulations may be cited as the Income Tax (Job Credits) Regulations.

2.   Interpretation

In these Regulations unless the context otherwise requires—

“business as a manufacturer” shall have the meaning ascribed thereto in section 34 of the Act;

“job credit” means an amount equivalent to such percentage of the total basic wages and salaries payable in any charge year during a qualifying period, and in respect of such employees, as is hereinafter provided;

“qualifying employee” means an individual who—

      (a)   is a Zambian citizen;

      (b)   immediately prior to commencing his employment with a qualifying employer, was not holding a similar employment or office;

      (c)   had been employed by a qualifying employer on a substantially full-time basis for the whole of a charge year; and

      (d)   if a director of a company, is also in full-time service of such company;

“qualifying business” means a business as a manufacturer;

“qualifying employer” means an employer engaged in a qualifying business;

“qualifying period” means any period of four consecutive charge years, the first of such periods commencing on 1st April 1980.

3.   Rates of job credits

Subject to the provisions of these Regulations—

      (a)   where an employer had commenced a qualifying business before 1st April, 1980, and the number of qualifying employees employed by him in any charge year during the qualifying period exceeds the number of qualifying employees in the charge year immediately preceding, he shall be allowed, against the tax chargeable on him for that charge year, job credits in an amount equivalent to five per centum of the total basic wages and salaries payable to such additional number;

      (b)   where an employer commences a qualifying business on or after 1st April, 1980, he shall be allowed, against the tax chargeable on him for that charge year, job credits calculated as follows:

      (i)   for the first charge year of the qualifying period, an amount equivalent to ten per centum of the total basic wages and salaries payable to all qualifying employees during such charge year;

      (ii)   with respect to the second and subsequent charge years of the qualifying period, he shall be subject to the provisions of sub-paragraph (a) as if he had commenced the qualifying business before 1st April, 1980.

4.   Job credits to partnerships

Where the qualifying business is a partnership, the amount of job credits shall be allowed against the tax chargeable on each partner in the same proportion as that partner's income from the partnership bears to the total income of the partnership.

5.   Excess of job credits not to be carried forward

Where the total amount of job credits allowable in a charge year is in excess of the amount of tax chargeable in such charge year the excess shall not be carried forward or allowed in any subsequent charge year.

6.   Job credits to be given once in respect of same employee

Once a qualifying employer has been allowed job credits in respect of a qualifying employee, such employer shall not be allowed any job credits in respect of the same employee in any subsequent charge year of the qualifying period.

INCOME TAX (LOW-COST HOUSING) NOTICE

[Fifth Schedule (1)]

[Currency mentioned in this regulation should be re-denominated as stipulated under S 4 of Re-denomination Act, 2012, read with S 29 of Bank of Zambia Act, 1996.]

Arrangement of Paragraphs

   Paragraph

   1.   Title

   2.   Limits for low-cost housing

SI 78 of 1987.

1.   Title

This Notice may be cited as the Income Tax (Low-Cost Housing) Notice.*

2.   Limits for low-cost housing

For the purpose of Part I of the Fifth Schedule to the Income Tax Act, a housing unit shall qualify as an industrial building if—

      (a)   in the case of a housing unit constructed or acquired before the 1st April, 1975, the cost of such housing unit does not exceed three thousand kwacha; or

      (b)   in the case of a housing unit constructed or acquired on or after the 1st April, 1975, the cost of such housing unit does not exceed four thousand kwacha; or

      (c)   in the case of a housing unit constructed or acquired on or after the 1st April, 1980, the cost of such housing unit does not exceed ten thousand kwacha; or

      (d)   in the case of a housing unit constructed or acquired on or after the 1st April, 1987, the cost of such housing unit does not exceed twenty thousand kwacha.

INCOME TAX (PETROLEUM OPERATIONS) REGULATIONS

[Section 9]

Arrangement of Paragraphs

   Paragraph

   1.   Title

   2.   Interpretation

   3.   Income from petroleum operations to be taxed separately

   4.   Determination of assessable income

   5.   Capital allowances

   6.   Taxable parties

[Regulations by the Minister]

SI 98 of 1985.

1.   Title

These Regulations may be cited as the Income Tax (Petroleum Operations) Regulations.

2.   Interpretation

In these Regulations unless the context otherwise requires—

“capital expenditure” means expenditure of a capital nature as determined pursuant to the terms of a contract;

“contract” and “contractor” shall have the meaning assigned thereto in the Petroleum (Exportation and Production) Act;

“expenditure” means net expenditure, in relation to petroleum operations, after taking into account any rebates of returns from expenditure;

“gross income” means the sum of all proceeds of sales and the monetary equivalent of the value of other dispositions of petroleum produced and save and not used in petroleum operations and any other proceeds derived from petroleum operations;

“operating expenditure” means expenditure of a non-capital nature as determined pursuant to the terms of a contract;

“petroleum operations” shall have the meaning assigned thereto in the Petroleum (Exploration and Production) Act.

3.   Income from petroleum operations to be taxed separately

   (1) The determination of the assessable income of a contract from petroleum operations and the assessment of tax thereon shall be made separately from the determination of assessable income and the assessment of tax on income from other sources.

   (2) The rules and procedures provided for in these Regulations shall apply only to the income and expenditure of a contractor from petroleum operations.

4.   Determination of assessable income

   (1) The determination of assessable income pursuant to the Income Tax Act shall be made by deducting from a contractor's gross income from petroleum operations during a charge year all allowable expenditure incurred or deemed incurred by such contractor in such charge year but excluding any expenditure previously deducted from gross income in any previous charge year.

   (2) Allowable expenditures which may be taken as a deduction from the gross income of a contractor in any charge year shall include—

      (a)   all operating expenditures incurred by such contractor in that year;

      (b)   the amount of any capital allowances in respect of capital expenditure of such contractor which may be deductible in that year;

      (c)   an amount in respect of any operating loss incurred to the extent provided in section 30 of the Act;

      (d)   any other expenditures which are specifically allowable as a deduction in that charge year against such contractor's gross income pursuant of his contract.

   (3) Allowable expenditures shall not include any expenditure of a contractor for which no deduction may be made pursuant to the terms of his contract.

5.   Capital allowances

Capital allowances in respect of the capital expenditure of a contractor shall be determined pursuant to the terms of his contract.

6.   Taxable parties

In the event that a contractor at any time comprises more than one person in the form of a partnership, joint venture, unincorporated association or other combination of persons, the determination of assessable income, and the assessment of tax thereon, in that charge year, shall be made on the basis of the assessable income and tax liability of each person comprising such contractor.

INCOME TAX (ZAMBIA APPOINTMENTS LIMITED EMPLOYEES) (EXEMPTION APPROVAL) ORDER

[Section 15]

Arrangement of Paragraphs

   Paragraph

   1.   Title

   2.   Interpretation

   3.   Exemption

   4.   Approval

[Order by the Minister]

SI 134 of 1994.

1.   Title

This Order may be cited as the Income Tax (Zambia Appointments Limited Employees) (Exemption Approval) Order.*

2.   Interpretation

In this Order—

“seconded expatriate mining employee” means an employee of the Company, or of any foreign subsidiary of the Company, who—

      (a)   under an agreement entered into before 1st April, 1994, was seconded to Zambia Consolidated Copper Mines Limited or any subsidiary thereof;

      (b)   is not a Zambian citizen; and

      (c)   is resident in the Republic solely for the purpose of the secondment;

“the Company” means Zambia Appointments Limited, a company registered under the laws of the United Kingdom of Great Britain and Northern Ireland.

3.   Exemption

There shall be exempt from tax pursuant to sub-paragraph (d) of paragraph 3 in Part II of the Second Schedule to the Act—

      (a)   the salary, gratuity, educational allowances and payments in commutation of leave paid outside the Republic by the Company or by any foreign subsidiary of the Company to or on account of any seconded expatriate mining employee; and

      (b)   any payment, made by the trustees of any pension or superannuation fund established or administered outside the Republic, to or on account of any such employee.

4.   Approval

For the purposes of the exemption contained in paragraph 3, the Company and any foreign subsidiary thereof are hereby approved for the purposes of sub-paragraph (d) of paragraph 3 in Part II of the Second Schedule to the Act.

INCOME TAX (FUND INVESTMENT SERVICES LIMITED) (APPROVAL AND EXEMPTION) ORDER

[Section 15]

Arrangement of Paragraphs

   Paragraph

   1.   Title

   2.   Approval and exemption from specific taxes

[Order by the Minister]

SI 51 of 1997.

1.   Title

       This Order may be cited as the Income Tax (Fund Investment Services Limited) (Approval and Exemption) Order.*

2.   Approval and exemption from specific taxes

   (1) The Fund Investment Services Limited, is hereby approved for the purpose of exemption from tax under the Second Schedule to the Act as set out in sub-paragraph (2).

   (2) Fund Investment Services Limited is exempt from the payment of—

      (a)   company tax;

      (b)   withholding tax on management fees;

      (c)   withholding tax on dividends received from any investee company; and

      (d)   withholding tax on interest received from any investee company.

INCOME TAX (ZAMBIA VENTURE CAPITAL FUND LIMITED) (APPROVAL AND EXEMPTION) ORDER

[Section 15]

Arrangement of Paragraphs

   Paragraph

   1.   Title

   2.   Approval and exemption from specific taxes

[Order by the Minister]

SI 52 of 1997.

1.   Title

This Order may be cited as the Income Tax (Zambia Venture Capital Fund Limited) (Approval and Exemption) Order.*

2.   Approval and exemption from specific taxes

   (1) The Zambia Venture Capital Fund Limited, is hereby approved for the purpose of exemption from tax under the Second Schedule to the Act as set out in sub-paragraph (2).

   (2) The Zambia Venture Capital Fund Limited is exempt from payment of—

      (a)   company tax;

      (b)   withholding tax on dividends received from any investee company; and

      (c)   withholding tax on interest received from any investee company.

INCOME TAX (FOREIGN ORGANISATIONS) (APPROVAL AND EXEMPTION) ORDER

[Section 15]

Arrangement of Paragraphs

   Paragraph

   1.   Title

   2.   Approval of foreign organisations

   3.   Exemption from tax

      SCHEDULE

[Order by the Minister]

SI 82 of 1997.

1.   Title

This Order may be cited as the Income Tax (Foreign Organisations) (Approval and Exemption) Order.*

2.   Approval of foreign organisations

With respect to the Agreement described in the Schedule to this Order, L. Hojgaard & Schultz; Joint Venture is hereby approved for the purpose of exemption from tax.

3.   Exemption from tax

The income and emoluments of the foreign organisation approved in paragraph 2 of this Order accruing under the Agreement described in the Schedule to this Order, shall be exempt from tax pursuant to paragraph 5 of Part III of the Second Schedule to the Act, and the emoluments payable to any foreign employee temporarily employed in the Republic shall be exempt from tax pursuant to sub-paragraph (c) of paragraph 3 of Part II of the said Second Schedule to the Act.

SCHEDULE

[Paragraph 5]

The Agreement between the Republic of Zambia and L. Hojgaard & Schultz; Joint Venture, dated the 18th December, 1996, relating to the rehabilitation of the Kapiri Mposhi-Serenje Road section of the Great North Road.

INCOME TAX (FOREIGN ORGANISATIONS) (APPROVAL AND EXEMPTION) ORDER

[Section 15]

Arrangement of Paragraphs

Paragraphs

   1.   Title

   2.   Approval of foreign organization

   3.   Exemption from tax

      SCHEDULE

SI 197 of 1996.

1.   Title

This Order may be cited as the Income Tax (Foreign Organisations) (Approval and Exemption) Order, 1996.

2.   Approval of foreign organisation

With respect to the Agreement described in the Schedule to this Order, the European Investment Bank is hereby approved for the purpose of exemption from tax.

3.   Exemption from tax

The income and emoluments of the foreign organisation approved in paragraph 2 of this Order accruing under the Agreement described in the Schedule to this Order shall be exempt from tax under sub-paragraph (b) of paragraph 4 in Part II of the Second Schedule to the Act.

SCHEDULE

[Paragraph 2]

AGREEMENT

The Financial Agreement between Barclays Bank Zambia Limited, Standard Chartered Bank Limited and Stanbic Bank Zambia Limited (as Borrowers) on the one part and European Investment Bank (as Lender) on the other part, for a loan of ten million European Currency Units (ECU 10,000,000) under the industrial credit facility of the Lome Convention.

INCOME TAX(PAY AS YOU EARN) REGULATIONS, 2014

[Section 71]

Arrangement of Regulations

PART 1
Preliminary

Regulation

   1.   Title

   2.   Interpretation

   3.   Employee’s certificate

PART II
Deduction and Repayment of Tax

   4.   Deductions and repayments

   5.   Casual employee

   6.   New monthly and weekly paid employees

   7.   Emoluments not paid weekly or monthly

   8.   Deduction of tax at maximum or lower rate

   9.   Payment without deduction of tax

   10.   Payslips

   11.   Tax deduction record

   12.   Certificate on change of employment

   13.   Death of employee

   14.   Tax free emoluments

   15.   Repayment of tax during sickness or employment

   16.   Certificate of tax deducted

PART III
Payment and Recovery of Tax

   17.   Payment of tax by employer

   18.   Failure by employer to make returns or pay tax

   19.   Inspection

   20.   Records

   21.   Death of employer

   22.   Succession to business

PART IV
Assessment and Direct Collection

   23.   Overpayments and under payments

   24.   Procedure for direct collection

PART V
General Provisions

   25.   Notices

   26.   Bonus commission and other additional payments

   27.   Time when emoluments paid

   28.   Arrangement for gratuity or service charge

   29.   Payment of emoluments by person not employer

   30.   Revocation of SI 97 of 1999

SI 50 of 2014.

PART I
Preliminary

1.   Title

   (1) These Regulations may be cited as the Income Tax (Pay As You Earn) Regulations, 2014.

2.   Interpretation

In these Regulations, unless the context otherwise requires–

“allowable pension contribution” means a sum paid by an employee by way of contribution towards an approved pension fund or scheme, which is allowed to be deducted as an expense under section 37 of the Act;

“appropriate tax table” in relation to a monthly paid employee, weekly paid employee or casual employee means the applicable tax table providing figures for monthly, weekly or daily deductions;

“authorised officer” means a person authorised by the Commissioner-General for the purposes of these Regulations;

“casual employee” has the meaning assigned to it in the Employment Act;

“chargeable emoluments’' in relation to an employee, means the emoluments from an employee’s employment, which are chargeable to income tax, but does not include any allowable pension contribution or any amount which is exempt from income tax;

“cumulative chargeable emoluments” in relation to a date in a charge year, means the aggregate amount of chargeable emoluments paid or deemed to have been paid by the employer to an employee from the beginning of the charge year up to and including that date;

“cumulative tax” in relation to an employee at any date in a charge year, means the tax due in accordance with the appropriate lax tables in respect of the employee's cumulative chargeable emoluments paid during the year to that date, abated by the aggregate of the tax credit due in respect of those emoluments from the beginning of the year to that date;

“director” has the meaning assigned to it in the Companies Act;

“employing entity” means a company, firm or organisation, that pays emoluments;

“monthly paid employee” means an employee whose emoluments are payable on a monthly basis;

“monthly return" means a return of payment of tax made under regulation 17;

“payment period” in relation to an employee, means a period beginning with the day immediately following the day on which an emolument is payable to the employee and endingwith the day on which the next payment of emoluments is payable;

“tax deduction record” means a record required to be kept under regulations 5, 11 and 24;

“tax table” means a tax table devised by the Commissioner-General under section 71 of the Act;

“total net tax deducted” in relation to the emoluments paid to an employee during any period, means the total tax deducted from the emoluments less any tax repaid to the employee; and

“weekly paid employee” means an employee whose emoluments are payable on a weekly basis.

3.   Employee's certificate

   (1) An employee shall, within thirty days of commencement of employment, notify the employer through a sworn affidavit, certifying whether or not–

      (a)   the current employment is the employee’s only employment;

      (b)   the employee is also an employee of another employer and that employment began before the employee’s current employment;

      (c)   the employee has been employed before in the charge year; or

      (d)   the employee has not been employed before in the charge year.

   (2) An employer shall not be liable for failure to deduct tax at the maximum rate from any payment of emoluments to an employee where–

      (a)   the employee has given the employer a certificate under this regulation; and

      (b)   the employer shows they relied on the truthfulness of the certificate, unless the employer knew or ought to have known that the certificate was untrue in any particular.

PART II
Deduction and Repayment of Tax

4.   Deductions and repayments

   (1) An employer shall deduct tax from the emoluments paid to an employee or repay tax to an employee, in accordance with the appropriate tax table.

   (2) An employer shall, on the date of payment of emoluments to an employee, ascertain the cumulative chargeable emoluments of the employee at the date of the payment and the cumulative tax in respect of those emoluments.

   (3) Where the cumulative tax exceeds the amount of the previous cumulative tax as at the time of the last preceding payment of emoluments to the employee in a charge year, the employer shall deduct the excess from the emoluments.

   (4) Where the cumulative tax is less than the amount of the previous cumulative tax, the employer shall repay the difference to the employee.

   (5) Where the cumulative tax is equal to the amount of the previous cumulative tax, tax shall not be deducted or repaid.

   (6) Where there is no previous cumulative tax, the employer shall deduct the cumulative tax from the emoluments when making the payment in question.

   (7) This regulation does not apply to a casual employee.

5.   Casual employee

   (1) An employer shall deduct tax from the emoluments paid to an employee in accordance with the appropriate tax table.

   (2) Where a casual employee is not paid on a daily basis, the amount of tax to be deducted from the employee’s chargeable emoluments in accordance with this regulation shall be found by–

      (a)   dividing the amount of the employee’s emoluments for a payment period by the number of days in that period;

      (b)   finding the amount of tax which the appropriate tax table requires to be deducted from a payment of emoluments of the amount under paragraph (a); and

      (c)   multiplying the amount found under paragraph (b) by the number of days in the employee’s pay period.

   (3) An employer of a casual employee shall keep a tax deduction record for any casual employee from whose emoluments tax is required to be deducted in such form as the Commissioner-General may specify in the Gazette.

   (4) An employer shall keep a written record of the names, dates of employment and emoluments of any casual employee for whom the employer is not required to keep a tax deduction record.

   (5) Regulations 8, 9, 11, 12 and 13 do not apply in relation to a casual employee.

6.   New monthly and weekly paid employees

   (1) An employer shall, where an employee who is not a casual employee commences employment with the employer after 1st January in a charge year, notify the Commissioner-General in such form as the Commissioner-General may specify in the Gazette.

   (2) Unless the employee has given the employer a certificate in accordance with subregulation (3) of regulation 12, the employer shall, up to end of the charge year, apply regulation 4–

      (a)   in the case of a monthly paid employee, as if each month the employee works for the employer was the month of January; and

      (b)   in the case of a weekly paid employee, as if each week the employee works for the employer was the first week of the year.

7.   Emoluments not paid weekly or monthly

An employer shall, where an employee’s payment period exceeds one month, calculate the tax due as follows–

      (a)   if the emoluments are payable once in a year, by reference to the tax table for the month of December in which the payment is made or it the emolument is made in any other month, for the December immediately following that month as if that were the table for the month in which the payment is made;

      (b)   if the emoluments are payable quarterly, by reference to the tax table for the last month in the quarter of the year in which the payment is made as if that were the table for the month in which the payment is made;

      (c)   if the emoluments are payable half-yearly, by reference to the table for June as respects the first payment made in the year, and by reference to the table for December as respects the second payment, as if in each case that were the table for the month in which the payment is made; or

      (d)   in any other case, by reference to the tax table tor the month in which the payment is made.

8.   Deduction or tax at maximum or lower rate

   (1) Regulations 4, 6 and 7 do not apply where tax shall be deducted in accordance with this regulation.

   (2) Subject to sub-regulations (4) and (5), an employer shall, where–

      (a)   chargeable emoluments of an employee are payable in respect of parttime employment; or

      (b) chargeable emoluments of an employee are paid after the employee ceases to be in employment;

deduct tax at the maximum rate from each payment of emoluments the employer makes to the employee, without regard to the employee’s cumulative tax or to any lax credit to which the employee may be entitled.

   (3) Sub-regulation (2) does not apply to any payment from which tax is required to be deducted under regulation 13.

   (4) Paragraph (b) of sub-regulation (2) does not apply to any lump sum payment or to any amount taxable in accordance with subsection (1) of section twenty-one of the Act, but where the payment is made, an employer shall deduct tax from that payment at the rate or rates specified in the Charging Schedule in relation to the payments for the tax year in which they are paid, without regard to the employee’s cumulative emoluments, the corresponding cumulative tax or to any tax credit to which the employee may be entitled.

   (5) For the purpose of this regulation, where emoluments are payable to an employee in respect of only one employment, that employment shall not be treated as part-time employment whatever the hours of employment.

   (6) Where an employee obtains other employment while still employed in the first employment, the later employment and any other employment shall be part-time employment for the purpose of these Regulations.

   (7) In this regulation, reference to the maximum rate of tax, in relation to any payment of emoluments, is a reference to the highest rate of income tax applicable to the income of an individual for the year in which the emoluments are payable.

9.   Payment without deduction of tax

   (1) The Commissioner-General may. in writing direct an employer to pay the gross amount of emoluments to an employee without deduction of tax.

   (2) Where a direction is made under subregulation (1), regulations 4, 6 and 7 shall not apply.

   (3) A direction made under sub-regulation (1) shall–

      (a)    identify the employer and employee concerned;

      (b)   apply to the payment of emoluments made after such date as may be specified in the direction, not being less than fourteen days after the date the direction is given to the employer; and

      (c)   be copied to the employee.

10.   Pay slips

An employer shall, on the date of payment of emoluments, inform the employee, in writing, of the total amount of the emoluments paid on that date and the total net tax deducted from the emoluments.

11.   Tax deduction record

   (1) An employer shall apply to the Commissioner-General for a lax deduction record.

   (2) The tax deduction record shall be in such form as the Commissioner-General may specify in the Gazette.

   (3) An employer shall keep a tax deduction record for each of the employees, whether or not any tax is required to be deducted or repaid under these Regulations, recording on the tax deduction record the particulars specified on it, and where different tax deduction records are prescribed for different purposes under these Regulations the employer shall use the appropriate record.

   (4) The tax deduction records may be kept by means of computer-generated records.

   (5) Where tax is not deductible from any payment, an employer shall, unless the Commissioner-General otherwise directs, make any repayment of tax which may be due by reference to the employee's cumulative emoluments and the corresponding cumulative tax.

12.   Certificate on change of employment

   (1) Where an employer ceases to employ an employee, not being a casual employee, the employer shall, within five days of the date on which the employment ceases, send a certificate to the Commissioner-General in such form as the Commissioner-General may specify in the Gazette.

   (2) An employer shall send a copy of the certificate to the employee on the date on which the employment ceases.

   (3) An employee shall, on commencing the next employment, deliver a copy of the certificate to the new employer and the new employer shall–

      (a)    insert the address of the employee and the date on which the employment commenced on the copy of the certificate;

      (b)   prepare a tax deduction record in accordance with the particulars given in the copy of the certificate and record on the tax deduction record the cumulative tax as at the week or month shown on the copy of the certificate;

      (c)   subject to sub-regulation (4), deduct or repay tax as if the cumulative emoluments and cumulative tax shown on the tax deduction record represented emoluments paid to the employee by the new employer; and

      (d)   send a copy of the certificate to the Commissioner-General within seven days from the date on which thecertificate is signed.

   (4) Where tax repayable under paragraph (c) of sub-regulation (3) on the date of the first payment exceeds three thousand kwacha,

the new employer shall forthwith notify the Commissioner-General and shall not make the repayment until authorised to do so by the Commissioner-General.

   (5) Where emoluments are paid by the same person before and after retirement, retirement on pension shall not be treated as cessation of employment for the purposes of this Regulation.

13.   Death of employee

An employer shall notify the Commissioner-General of an employee’s death.

   (2) The notification of death under subregulation (1) shall be made in such form as the Commissioner-General may specify in the Gazette within seven days of making the outstanding payment of, and deductions from, emoluments of the deceased employee.

   (3) An employer shall, where emoluments are paid after the date of the employee’s death–

      (a)   pay emoluments exempt from tax under subsection (5) of section 21 of the Act without any deduction of tax;

      (b)   deduct tax from the balance of emoluments specified under paragraph (a) at the rate specified in the Charging Schedule in relation to such emoluments for the tax year in which they are paid, without regard to the employee’s cumulative emoluments, the corresponding cumulative tax or to any tax credit to which the employee may be entitled; and

      (c)   as respects emoluments not within paragraph (a), deduct or pay tax as if the deceased employee was still in employment at the date of payment.

14.   Tax free emoluments

   (1) Where an employer agrees with an employee to pay to the employee a specified amount of emoluments, in this regulation referred to as “the net emoluments” and to bear on the employee’s behalf any tax chargeable in respect of the net emoluments–

      (a)   the agreement shall be read as an agreement by the employer to pay to the employee such gross emoluments as will after deduction of tax in accordance with these Regulations be equal to the net emoluments; and

      (b)   the employer shall calculate the amount of tax to be deducted from any payment of the employee’s emoluments in accordance with these Regulations by reference to the gross emoluments of the employee, and not by reference to the employee’s net emoluments.

   (2) Where the employer agrees to bear on behalf of an employee any tax due on any emoluments of the employee payable in a charge year, the employer shall give notice to the Commissioner-General within fourteen days of the beginning of the year or of the commencement of the employment in question, whichever is the later, stating–

      (a)   the names and addresses of the employer and the employee;

      (b)   the net amount of the emoluments in question and if they are not payable wholly free of tax, how much is so payable or what level of tax will be borne by the employer; and

      (c)   such other information as the Commissioner-General may require.

15.   Repayment of tax during sickness or unemployment

   (1) Where an employee is not entitled to any emoluments due to absence from work, the employer shall, on the usual pay date, make such repayment of tax to the employee as may be appropriate, having regard to the cumulative emoluments on that date and the corresponding cumulative tax, notwithstanding that the employee is not entitled to any emoluments on that date.

   (2) An employee who has ceased to be employed may, at the end of the charge year and in accordance with section 87 of the Act, apply to the Commissioner-General for a repayment of tax for each month for which the employee requires a tax refund in such form as the Commissioner-General may specify in the Gazette.

   (3)    An application made under subregulation (2) shall include a notice showing the total amount of emoluments paid to the employee and the total net tax deducted.

16.   Certificate of Tax deducted

   (1) An employer shall give to an employee–

      (a)   who is in the employer’s employment on the last day of a charge year; or

      (b)   who has ceased to be employed by the employer during a charge year;

from whose emoluments tax is required to be deducted under these Regulations, a certificate in such form as the Commissioner-General may specify in the Gazette.

   (2) A certificate under subregulation (1) shall be given to the employee before the 1st March following the end of the charge year in question.

PART III
Payment and Recovery of Tax

17.   Payment of tax by employer

   (1) An employer shall, within fourteen days of the end of an income tax month, send a monthly return to the Commissioner-General in such form as the Commissioner-General may specify in the Gazette.

   (2) An employer shall, where there is an excess of the amount deductible over the repayments, remit with the monthly return an amount equal to the excess to the Commissioner-General.

   (3) The Commissioner-General shall give an employer a receipt showing the amount of tax remitted by the employer.

   (4) Where the monthly return made under sub-regulation (1) shows an excess of repayments over the deductions, an employer may deduct the excess from a subsequent payment which the employer is required to make to the Commissioner-General under sub-regulation (1), or the employer may recover the excess from the Commissioner-General.

   (5) Where the tax paid by an employer to the Commissioner-General in respect of an employee exceeds the amount actually deducted by the employer from the emoluments paid to the employee during the month, the employer may deduct an amount equal to the excess from the subsequent emoluments of the employee.

   (6) A monthly return shall be signed, where the employer is–

      (a)   an individual, by the individual;

      (b)   a company, by a director or secretary of the company;

      (c)   a body of persons, by a principal officer of the body of persons; and

      (d)   a partnership, by a partner of the partnership.

   (7) A monthly return may also be signed by a tax paying agent or any authorised representative of the employer.

   (8) An employer who fails to submit a monthly return in accordance with this regulation is liable to pay a penally of one thousand penalty units for each calendar month or part thereof.

   (9) The Commissioner-General may remit the whole or part of the penalty specified under sub-regulation (8).

18.   Failure by employer to make returns or pay tax

   (1) Where an employer fails to make a return or remit tax, the Commissioner-General may–

      (a)   make an estimate of the amount of tax which the employer is required to remit and issue a notice requiring the employer to pay that estimated amount of tax; or

      (b)   by notice, require the employer to submit a default return for that month in such form as the Commissioner-General may specify in the Gazette.

   (2) An employer shall comply with the notice served under sub regulation (1) within fourteen days of the date of the notice.

   (3) Where an employer pays any emoluments for a charge year to an employee after the end of that year or after the end of the employment, the employer shall, within fourteen days after the month in which the payment was made, submit a supplementary return in such form as the Commissioner-General may specify in the Gazette.

19.   Inspection

   (1) An employer shall, upon request by an authorised officer, produce to the officer for inspection–

      (a)   all wage sheets, tax deduction records, payslips and other documents or records relating to–

      (i)   the calculation or payment of emoluments in respect of the years or income tax months specified by the officer; and

      (ii)   the deduction of tax; and

      (b)   such other documents and records as may be specified by the authorised officer.

   (2) Where the records are kept by the employer on a computer, the employer shall allow the officer reasonable access to the computer to examine the records.

   (3) Where an officer requests a copy of a record or document, the employer shall provide the officer with the copy.

   (4) The Commissioner-General may, by notice, require an employer to submit, within such lime as may be specified in the notice, not being less than twenty-one days, all the tax deduction records relating to specified employees of the employer in that year or in any of the preceding six years.

   (5) Where the Commissioner-General has reasonable grounds for believing that the case involves fraud, the Commissioner-General may require the submission of tax deduction records for earlier years.

20. Records

An employer shall retain all records required to be kept for Ihe purposes of these Regulations and all documents given or sent to the employer for those purposes until the expiry of a period of six years beginning with the year to which a record or document relates.

21.   Death of employer

Where an employer dies, anything which the employer is required to do under these Regulations shall be done by the employer’s personal representative or, in the case of an employer who pays emoluments on behalf of another person, by the person succeeding the employer or, if no person succeeds the employer, the person on whose behalf the employer paid the emoluments.

22.   Succession to business

   (1) Where an undertaking carried on by an employer is transferred to another employer, the change in employer shall not in relation to the employees transferred to that employer, be treated as a change of employment for the purposes of these Regulations, and the new employer shall be liable to do anything which the old employer would have been required to do under these Regulations as if the change had not taken place.

   (2) The new employer shall not be liable for the payment of tax which was deductible from emoluments paid to an employee before the change took place.

PART IV
Assessment and Direct Collection

23.   Overpayments and underpayments

   (1) Where the tax payable under an assessment is less than the total net tax deducted from the employee’s emoluments during the year, the Commissioner-General shall repay the difference to the employee.

   (2) The Commissioner-General may require an employee to pay the excess where the tax payable under an assessment exceeds the total net tax deducted from the employee’s emoluments during the year.

24.   Procedure for direct collection

   (1) This regulation applies to an employee of a foreign mission or international organisation which is exempt from tax under the Diplomatic Immunities and Privileges Act, other than an employee who is exempt from lax.

   (2) An employee referred to in sub-regulation (1) may use a tax deduction record.

   (3) Where an employee receives chargeable emoluments during the year for which a tax deduction record is required, the employee shall record on that record the emoluments, the date on which the employee received them, the employee’s cumulative chargcable emoluments and the corresponding cumulative tax.

   (4) An employee shall, within fourteen days after the end of every month–

      (a)   make a return to the Commissioner-General stating the amount of the cumulative tax corresponding to the employee’s cumulative chargeable emoluments as at the last date in the month in question on which the employee received emoluments, reduced by the amount of tax paid to the Commissioner-General in respect of the previous months in the same year; and

      (b)   remit to the Commissioner-General with the return a sum equal to the amount of the cumulative tax as so reduced.

   (5) Where an employee–

      (a)    has not made a return or remitted tax to the Commissioner-General; or

      (b)   has remitted an amount of tax but the Commissioner-General is not satisfied that it is the amount which the employee is required to pay; the Commissioner-General may, by notice, require the employee, within the specified time, to make a return or to remit to the Commissioner-General such amount of tax as may be specified in the notice.

   (6) Where an employee ceases to receive emoluments from an employer, the employee shall make a return to the Commissioner-General showing the last date on which the employee received any emoluments, the employee’s cumulative emoluments at that date and the corresponding cumulative tax.

   (7) An employee shall not use one tax deduction record in respect of two or more employment capacitics.

PART V
General Provisions

25.   Notices

   (1) A notice or document authorised or required to be given, served or issued under these Regulations may be sent in person, electronically or by post to the last known address of the addressee.

   (2) A notice or document sent under sub-regulation (1) shall be deemed to have been received by the addressee within ten days from the date on which the notice or document was posted.

26.   Bonus commission ami other additional payments

Where an employer makes a payment of an amount of emoluments to an employee which is not the basic salary or wage on a day which is not the employee’s regular pay day, the employer shall deduct an amount of tax from that payment equal to the difference between–

      (a)   the amount the employer will deduct from the employee's next payment of the basic salary or wage; and

      (b)   the amount the employer would have deducted from the employee’s next payment of the basic salary or wage if the payment which is not the basic salary or wage were paid on the employee’s next regular pay day.

27.   Time when emoluments paid

   (1) For the purposes of these Regulations, a payment of, or on account of, a chargeable emolument shall be treated as made at the earliest of the following times–

      (a)   at the time when the payment is received by a person within the meaning of section 5 of the Act;

      (b)   at the time when the sum on account of the income is credited where–

      (i)   the emolument is an emolument from employment;

      (ii)   a sum on account of the emoluments is credited to an employer’s accounts or records at any time during a charge year; and

      (iii)   the holder of the employment is a director or a person exercising control of an employing entity during that charge year;

      (c)   at the time when the period ends or the time when the amount is determined, whichever is later, where–

      (i)   the emoluments are emoluments from an employment for a certain period; and

      (ii)   the holder of the employment is a director or a person exercising control or management of an employing entity at any time in the year in which the amount of the emolument is determined.

   (2) For the purposes of paragraph (c) sub-regulation (1), a restriction on the right to draw the sums shall be disregarded.

28.   Arrangement for gratuity or service charge

   (1) Where an arrangement or agreement exists for a gratuity or service charge to be shared by a person among two or more employees, payment to an employee by way of sharing out of the gratuity or service charge by the person, including the retention by that person of a share where the person is also an employee, shall be regarded for the purposes of these Regulations as a payment of emoluments.

   (2) A person making the payment under sub-regulation (1) shall be treated for the purposes of these Regulations as an employer.

   (3) The Commissioner-General may, where satisfied that a person has failed to comply with this regulation, direct that sub-regulation (1) shall not apply to the agreement or arrangement under which that person makes the payment and that a share of gratuity or service charge shall be assessed under section 63 of the Act on the employee or employees receiving the share.

29.   Payment of emoluments by person not employer

   (1) Sub-regulation (2) applies where–

      (a)   an employee works during any period for a person, in this regulation referred to as “the relevant person” who is not the employee’s employer;

      (b)   a person other than the relevant person makes a payment of, or on account of, chargeable emoluments of the employee in respect of the work done in that period;

      (c)   these Regulations do not apply to the person making the payment; and

      (d)   tax chargeable in respect of the payment is not deducted and accounted for in accordance with these Regulations by the person making the payment.

   (2) For the purposes of these Regulations, and where this sub-regulation applies, the relevant person shall be treated as making the payment and as the employer of the employee.

   (3) Where emoluments are paid to an employee by one person in respect of a period and by another person in respect of a period which is wholly or partly the same as that other period, subregulation (1) shall apply separately to each person making any such payment in respect of a payment period as if emoluments in respect of that period were paid to the employee only by that person.

   (4) Where the relevant person is treated as making a payment to an employee–

      (a)   the obligation to deduct tax from that payment shall have effect as an obligation to make the deduction from any payment of chargeable emoluments which the relevant person does actually make to the employee;

      (b)   if the relevant person is not able to make the deduction from the payment, that person shall, not laler than fourteen days after the month in which the obligation arose, account to the Commissioner-General for an amount of income tax equal to the amount of the deduction which the relevant person has not made; and

      (c)   any amount deducted and accounted for under this regulation shall be treated as an amount paid by theemployee in question in respect of the employer’s liability to income tax for the year in which the obligation rose.

30.   Revocation of SI 97 of 1999

The Income Tax (Pay As You Earn) Regulations, 1999, are hereby Revoked.

INCOME TAX (EUROPEAN INVENSTMENT BANK) (APPROVAL AND EXEMPTION) ORDER, 2014

[Section 15]

Arrangement of Paragraphs

   Paragraph

   1.   Title and commencement

   2.   Approval of international organisation

   3.   Exemption from tax

      Schedule

SI 56 of 2014.

1.   Title and commencement

   (1) This Order may be cited as the Income Tax (European Investment Bank) (Approval and Exemption) Order, 2014.

   (2) This Order shall be deemed to have come into operation on 10th October, 2014.

2.   Approval of international organisation

The European Investment Bank is an approved organisation for purposes of exemption from tax with respect to the Agreement specified in the Schedule.

3.   Exemption from tax

The income earned, including interest, fees and commission, by the organisation approved in paragraph 2 and accruing under the Agreement specified in the Schedule shall be exempt from tax pursuant to subparagraph (5) of paragraph 5 of Part III of the Second Schedule to the Act.

SCHEDULE

[Paragraph 2]

Agreement

The Partnership Agreement between the members of the African, Caribbean and Pacific group of States of the one part and the European Community and its Member States of the other part, signed in Cotonou on 23rd June, 2000.

DOUBLE TAXATION RELIEF (TAXES ON INCOME) (REPUBLIC OF FINLAND) ORDER

[Section 74]

Arrangement of Paragraphs

   Paragraph

   1.   Title

   2.   Convention

      SCHEDULE

SI 77 of 1985.

1.   Title

This Order may be cited as the Double Taxation Relief (Taxes on Income) (Republic of Finland) Order.

2.   Convention

It is hereby declared that the Convention, the text of which is set out in the Schedule hereto, being a Convention relating to relief for double taxation on income made between the Government of the Republic of Zambia and the Government of the Republic of Finland, shall have effect in Zambia in accordance with section 74 of the Income Tax Act.

SCHEDULE

[Paragraph 2]

CONVENTION BETWEEN ZAMBIA AND FINLAND FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL

The Government of the Republic of Zambia and the Government of the Republic of Finland, desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital;

Have agreed as follows:

ARTICLE 1
PERSONAL SCOPE

This Convention shall apply to persons who are residents of one or both of the Contracting States.

ARTICLE 2
TAXES COVERED

1. This Convention shall apply to taxes on income and on capital imposed on behalf of each Contracting State or of its public communities or local authorities, irrespective of the manner in which they are levied.

2. There shall be regarded as taxes on income and on capital all taxes imposed on total income, on total capital, or on elements of income or of capital, including taxes on gains from the alienation of movable or immovable property, as well as taxes on capital appreciation.

3. The existing taxes to which the Convention shall apply are—

      (a)   in Finland:

      (i)   the state income and capital tax;

      (ii)   the communal tax;

      (iii)   the church tax;

      (iv)   the sailors' tax; and

      (v)   the tax withheld at source from non-residents' income;

      (hereinafter referred to as Finnish tax);

      (b)   in Zambia:

      (i)   the income tax;

      (ii)   the mineral tax;

      (iii)   the personal levy;

      (hereinafter referred to as Zambian tax).

4. The Convention shall apply also to any identical or substantially similar taxes which are imposed after the date of signature of this Convention in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall notify to each other any significant changes which have been made in their respective taxation laws.

ARTICLE 3
GENERAL DEFINITIONS

1. In this Convention, unless the context otherwise requires:

      (a)   The term “Finland” means the Republic of Finland and, when used in a geographical sense, means the territory of the Republic of Finland, and any area adjacent to the territorial waters of the Republic of Finland within which, under the laws of Finland and in accordance with international law, the rights of Finland with respect to the exploration and exploitation of the natural resources of the sea bed and its sub-soil may be exercised;

      (b)   the term “Zambia” means the Republic of Zambia;

      (c)   the terms “a Contracting State” and “the other Contracting State” mean Finland or Zambia, as the context requires;

      (d)   the term “person” comprises an individual, a company and any other body of persons;

      (e)   the term “company” means any body corporate or any entity which is treated as a body corporate for tax purposes;

      (f)   the terms “enterprise of a Contracting State” and “enterprise of the other Contracting State” mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State;

      (g)   the term “national” means any individual possessing the nationality of a Contracting State, and any legal person, partnership and association deriving its status as such from the laws in force in a Contracting State;

      (h)   the term “international traffic” means any transport by a ship or aircraft operated by an enterprise which has its place of effective management in a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State;

      (i)   the term “competent authority” means:

      (i)   in Finland, the Ministry of Finance or its authorised representative.

      (ii)   in Zambia, the Commissioner-General of Taxes or his authorised representative.

2. As regards the application of the Convention by a Contracting State any term not defined therein shall, unless the context otherwise requires, have the meaning which it has under the law of that State concerning the taxes to which the Convention applies.

ARTICLE 4
FISCAL DOMICILE

1. For the purposes of this Convention, the term “resident of a Contracting State” means any person who, under the law of that State, is liable to taxation therein by reason of his domicile, residence, place of management or any other criterion of a similar nature. An undivided estate of a deceased person shall be deemed to be a resident of the Contracting State of which the deceased was a resident at the time of his death according to the preceding sentence or the provisions of paragraph 2. However, this term does not include any person who is liable to taxation in that Contracting State in respect only of income from sources in that State or capital situated therein.

2. Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined as follows:

      (a)   He shall be deemed to be a resident of the Contracting State in which he has a permanent home available to him. If he has a permanent home available to him in both Contracting States, he shall be deemed to be a resident of the Contracting State with which his personal and economic relations are closet (centre of vital interests);

      (b)   If the Contracting State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either Contracting State, he shall be deemed to be a resident of the Contracting State in which he has an habitual abode;

      (c)   If he has an habitual abode in both Contracting States or in neither of them, he shall be deemed to be a resident of the Contracting State of which he is a national;

      (d)   If he is a national of both Contracting States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.

3. Where by reason of the provisions of paragraph 1 a person, other than an individual, is a resident of both Contracting States, then it shall be deemed to be a resident of the Contracting State in which its place of effective management is situated.

ARTICLE 5
PERMANENT ESTABLISHMENT

1. For the purposes of this Convention, the term “permanent establishment” means a fixed place of business through which the business of an enterprise is wholly or partly carried on.

2. The term “permanent establishment” shall include especially:

      (a)   a place of management;

      (b)   a branch;

      (c)   an office;

      (d)   a factory;

      (e)   a workshop; and

      (f)   a mine, an oil well, a quarry or any other place of extraction of natural resources.

3. A building site or a construction, assembly or installation project or supervisory activities in connection therewith constitutes a permanent establishment only if such site, project or activity lasts for a period of more than six months.

4. The furnishing of services, including management or consultancy services, by an enterprise of a Contracting State through employees or other personnel, where activities of that nature continue (for the same or a connected project) in the other Contracting State for a period or periods aggregating more than three months within any twelve-month period shall constitute a permanent establishment in that other State.

5. The term “permanent establishment” shall be deemed not to include:

      (a)   the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise;

      (b)   the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery;

      (c)   the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;

      (d)   the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise, or for collecting information, for the enterprise;

      (e)   the maintenance of a fixed place of business solely for the purpose of carrying on, for the enterprise any other activity of a preparatory or auxiliary character;

      (f)   the maintenance of a fixed place of business solely for any combination of activities mentioned in sub-paragraphs (a) to (e) provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary character.

6. A person acting in a Contracting State on behalf of an enterprise of the other Contracting State-other than an agent of an independent status to whom the provisions of paragraph 8 apply-shall be deemed to be a permanent establishment in the first-mentioned State if:

      (a)   he has, and habitually exercise in that State, an authority to conclude contracts on behalf of the enterprise, unless his activities are limited to the purchase of goods or merchandise for that enterprise, or

      (b)   he has no such authority, but habitually maintains in the first-mentioned State a stock of goods or merchandise from which he regularly delivers goods or merchandise on behalf of the enterprise.

7. An insurance enterprise of a Contracting State shall, except in regard to re-insurance, be deemed to have a permanent establishment in the other Contracting State, if it collects premiums in the territory of that other State or insures risks situated therein through an employee or through a representative who is not an agent of an independent status within the meaning of paragraph 8.

8. An enterprise of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other State through a broker, general commission agent or any other agent of an independent status, where such persons are acting in the ordinary course of their business.

9. The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other.

ARTICLE 6
INCOME FROM IMMOVABLE PROPERTY

1. Income from immovable property including income from agriculture or forestry may be taxed in the Contracting State in which such property is situated.

2.   —

      (a)   The term “immovable property” shall, subject to the provisions of sub-paragraphs (b) and (c), be defined in accordance with the law of the Contracting State in which the property in question is situated.

      (b)   The term “immovable property” shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources.

      (c)   Ships and aircraft shall not be regarded as immovable property.

3. The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or use in any other form of immovable property.

4. Where the ownership of shares or other corporate rights in a company entitles the owner of such shares or corporate rights to the enjoyment of immovable property owned by the company, the income from the direct use, letting, or use in any other form of such right to enjoyment may be taxed in the Contracting State in which the immovable property is situated.

5. The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property of an enterprise and to income from immovable property used for the performance of independent personal services.

The provisions of paragraph 4 shall likewise apply to the income from a right of enjoyment referred to in that paragraph of an enterprise and to income from such right of enjoyment used for the performance of independent personal services.

6. In determining the income from immovable property which a resident of a Contracting State has in the other Contracting State expenses (including interest on debt-claims) which are incurred for the purposes of such property shall be allowed as deductions on the same conditions as they are allowed to residents of that other State.

ARTICLE 7
BUSINESS PROFITS

1. The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is attributable to that permanent establishment and to sales of goods or merchandise, or the supply of services, where such sales or services are of the same kind as, or of a similar kind to, those effected through that permanent establishment.

2. Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment.

3. In the determination of the profits of a permanent establishment there shall be allowed as deductions expenses which are incurred for the purpose of the permanent establishment including executive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere.

4. Insofar as it has been customary in a Contracting State to determine the profits to be attributed to a permanent establishment on the basis of an apportionment of the total profits shall preclude that Contracting State from determining the profits to be taxed by such an apportionment as may be customary. The method of apportionment adopted shall, however, be such that the result shall be in accordance with the principles embodied in this Article.

5. No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise.

6. For the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary.

7. Where profits include items of income which are dealt with separately in other Articles of this Convention, then the provisions of those Articles shall not be affected by the provisions of this Article.

ARTICLE 8
SHIPPING AND AIR TRANSPORT

1. Profits from the operation of ships or aircraft in international transport shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.

2. If the place of effective management of a shipping enterprise is aboard a ship, then it shall be deemed to be situated in the Contracting State in which the home harbour of the ship is situated, or, if there is no such home harbour, in the Contracting State of which the operator of the ship is a resident.

3. The provisions of paragraph 1 shall also apply to profits derived from the participation in a pool, a joint business or in an international operating agency.

ARTICLE 9
ASSOCIATED ENTERPRISES

Where—

      (a)   an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State; or

      (b)   the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State;

and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly.

ARTICLE 10
DIVIDENDS

1. Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State.

2. However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident, and according to the law of that State, but if the recipient is the beneficial owner of the dividends the tax so charged shall not exceed:

      (a)   5 per cent of the gross amount of the dividends if the beneficial owner is a company (excluding partnership) which holds directly at least 25 per cent of the capital of the company paying the dividends;

      (b)   15 per cent of the gross amount of the dividends in all other cases.

The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of this limitation.

This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.

3. The term “dividends” as used in this Article means income from shares, or other rights, not being debt-claims, participating in profits, as well as income from other corporate rights which is subjected to the same taxation treatment as income from shares by the taxation law of the State of which the company making the distribution is a resident.

4. The provisions of paragraph 1 and 2 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such a case, the provisions of Article 7 or Article 14, as the case may be, shall apply.

5. Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company, except insofar as such dividends are paid to a resident of that other State or insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or a fixed base situated in that other State, or subject the company's undistributed profits to a tax on the company's undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State.

ARTICLE 11
INTEREST

1. Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

2. However, such interest may also be taxed in the Contracting State in which it arises, and according to the law of that State, but if the recipient is the beneficial owner of the interest the tax so charged shall not exceed 15 per cent of the gross amount of the interest. The competent authorities of the Contracting State shall by mutual agreement settle the mode of application of this limitation.

3. Notwithstanding the provisions of paragraph 2, interest arising in a Contracting State and paid to the Government of the other Contracting State or a public community or a local authority thereof or any agency or instrumentality (including a financial institution) wholly owned by that Government or public community or local authority shall be exempt from tax in the first-mentioned State.

4. The term “interest” as used in this Article means income from debt-claims of every kind; whether or not secured by mortgage, and whether or not carrying a right to participate in the debtors' profits, and in particular, income from government securities and income from bonds or debentures, including premiums and prizes attaching to bonds or debentures. Penalty charges for late payment shall not be regarded as interest for the purpose of this Article.

5. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the interest, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises, through a permanent establishment situated therein, or performs in that other State independent. Personal services from a fixed base situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment or fixed base. In such a case the provisions of Article 7 or Article 14, as the case may be, shall apply.

6. Interest shall be deemed to arise in a Contracting State when the payer is the State itself, a public community, a local authority or a resident of that State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by the permanent establishment or fixed base, then such interest shall be deemed to arise in the Contracting State in which the permanent establishment or fixed base is situated.

7. Where, owing to a special relationship between the payer and the beneficial owner of between both of them and some other person, the amount of the interest paid, having regard to the debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In that case, the excess part of the payments shall remain taxable according to the law of each Contracting State, due regard being had to the other provisions of this Convention.

ARTICLE 12
ROYALTIES

1. Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

2. However, royalties of the kind referred to in sub-paragraph (b), (c) and (d) of paragraph 3 may also be taxed in the Contracting State in which they arise, and according to the law of that State, but the tax so charged shall not exceed 5 per cent, in the case of royalties referred to in sub-paragraphs (b), and 15 per cent, in the case of royalties referred to in sub-paragraphs (c) and (d), of the gross amount of the royalties. The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of this limitation.

3. The term “royalties” as used in this Article means payments of any kind received as a consideration:

      (a)   for the use of, or the right to use, any copyright of literary, artistic or scientific work;

      (b)   for the use of, or the right to use, any copyright of any cinematograph films, and films or tapes for television or radio broadcasting;

      (c)   for the use of, or the right to use, any patent, trade mark, design or model, plan, secret formula or process, or any industrial, commercial or scientific equipment; or

      (d)   for information concerning industrial, commercial or scientific experience.

4. The provisions of paragraphs 1 and 2 shall not apply if the recipient of the royalties, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties arise, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment or fixed base. In such a case, the provisions of Article 7 or Article 14, as the case may be, shall apply.

5. Royalties shall be deemed to arise in a Contracting State when the payer is that State itself, a public community, a local authority or a resident of that State. Where, however, the person paying the royalties, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the liability to pay the royalties was incurred, and such royalties are borne by such permanent establishment or fixed base, then such royalties shall be deemed to arise in the Contracting State in which the permanent establishment or fixed base is situated.

6. Where, owing to a special relationship between the payer and the recipient or between both of them and some other person, the amount of the royalties paid, having regard to the use, right or information for which they are paid, exceeds the amount which would have been agreed upon by the payer and the recipient in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In that case, the excess part of the payments shall remain taxable according to the law of each Contracting State, due regard being had to the other provisions of this Convention.

ARTICLE 13
CAPITAL GAINS

1. Gains from the alienation of immovable property, as defined in paragraph 2 of Article 6, may be taxed in the Contracting State in which such property is situated.

2. Gains from the alienation of shares or other corporate rights referred to in paragraph 4 of Article 6, may be taxed in the Contracting State in which the immovable property owned by the company is situated.

3. Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or of movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, including such gains from the alienation of such a permanent establishment (alone or together with the whole enterprise) or of such a fixed base, may be taxed in the other State. However, gains from the alienation of movable property of the kind referred to in paragraph 4 of Article 22 shall be taxable only in the Contracting State in which such movable property is taxable according to the said Article.

4. Gains from the alienation of any property other than those mentioned in paragraphs 1, 2 and 3, shall be taxable only in the Contracting State of which the alienator is a resident.

ARTICLE 14
INDEPENDENT PERSONAL SERVICES

1. Income derived by an individual resident of a Contracting State in respect of his professional services or other independent activities of a similar character shall be taxable only in that state unless:

      (a)   he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his services or activities, in which case so much or the income may be taxed in that other State as is attributable to that fixed base; or

      (b)   he is present in the other Contracting State for the purpose of performing his services or activities for a period or periods amounting to or exceeding in the aggregate 183 days in the taxable year concerned, in which case so much of the income may be taxed in that other State as is attributable to the services or activities performed in that other State.

2. The term “professional services or other independent activities” includes especially independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, lawyers, engineers, architects, dentists and accountants.

ARTICLE 15
DEPENDENT PERSONAL SERVICES

1. Subject to the provisions of Articles 16, 18, 19 and 20; salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State.

2. Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if:

      (a)   the recipient is present in the other state for a period or periods not exceeding in the aggregate 183 days in the calendar year concerned; and

      (b)   the remuneration is paid, by or on behalf of, an employer who is not a resident of the other State; and

      (c)   the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State.

3. Notwithstanding the preceding provisions of this Article, remuneration in respect of an employment exercised aboard a ship or aircraft in international traffic, may be taxed in the Contracting State in which the place of effective management of the enterprise is situated.

ARTICLE 16
DIRECTORS' FEES

Directors' fees and similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors or another similar organ of a company which is a resident of the other Contracting State may be taxed in that other State.

ARTICLE 17
ARTISTES AND ATHLETES

1. Notwithstanding the provisions of Articles 14 and 15, income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or television artiste, or a musician, or as an athlete, from his personal activities as such exercised in the other Contracting State, may be taxed in that other State.

2. Where income in respect of personal activities exercised by an entertainer or an athlete in his capacity as such accrues not to the entertainer or athlete himself but to another person, that income may, notwithstanding the provisions of Articles 7, 14 and 15, be taxed in the Contracting State in which the activities of the entertainer or athlete are exercised.

ARTICLE 18
PENSIONS

1. Any pension (other than a pension of the kind referred to in paragraph 2) or any annuity derived by an individual who is a resident of a Contracting State from sources within the other Contracting State may be taxed in that other State.

2. Subject to the provisions of paragraph 2 of Article 19, pensions and other payments made under the social security legislation of a Contracting State shall be taxable only in that State.

3. The term “pension” means a periodic payment made in consideration of services rendered in the past or by way of compensation or injuries received during the course of an employment.

4. The term “annuity” means a stated sum payable periodically at stated times, during life or during a specified or ascertainable period of time, under an obligation to make the payment in return for adequate and full compensation in money or money’s worth.

ARTICLE 19
GOVERNMENT SERVICE

1.

      (a)   Remuneration, other than a pension, paid by a Contracting State or a public community or a local authority thereof to any individual in respect of services rendered to that State or community or local authority thereof shall be taxable only in that State.

      (b)   However, such remuneration shall be taxable only in the Contracting State of which the recipient is a resident if the services are rendered in that State and the Recipient:

      (i)   is a national of that State; or

      (ii)   did not become a resident of that State solely for the purpose of performing the services.

2.

      (a)   Any pension paid by, or out of funds created by, a Contracting State or a public community or a local authority thereof to any individual in respect of services rendered to that State or community or local authority thereof shall be taxable only in that State.

      (b)   However, such pension shall be taxable only in the Contracting State of which the recipient is a resident if he is a national of that State.

3. The provisions of Articles 15, 16 and 18 shall apply to remuneration and pensions in respect of services rendered in connection with any business carried on by a Contracting State or a public community or a local authority thereof.

ARTICLE 20
STUDENTS

1. Payments which a student or business, technical, agricultural or forestry apprentice who is or was immediately before visiting a Contracting State a resident of the other Contracting State and who is present in the first-mentioned State solely for the purpose of his maintenance, education or training shall not be taxed in that State, provided that such payments are made to him from sources outside the State.

2. A student at a university or other institution for higher education in a Contracting State, or a business, technical, agricultural or forestry apprentice who is or was immediately before visiting the other Contracting State a resident of the first-mentioned State and who is present in the other State for a period or periods not exceeding in the aggregate 365 days in any continuous period of two years, shall not be taxed in that other State in respect of remuneration for services rendered in that State, provided that the services are in connection with his studies or training and the remuneration constitutes earnings necessary for his maintenance.

ARTICLE 21
OTHER INCOME

1. Items of income of a resident of a Contracting State not dealt with in the foregoing Articles of this Convention shall be taxable only in that State. However, where such item of income arises in the other Contracting State such income may be taxed in that other State.

2. The provisions of paragraph 1 shall not apply to income, other than income from immovable property as defined in paragraph 2 of Article 6 and income from shares or other corporate rights referred to in paragraph 4 of Article 6, if the recipient of the income, being a resident of a Contracting State, carries on business in the other Contracting State through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the income is paid is effectively connected with such permanent establishment or fixed base. In such a case, the provisions of Article 7 or Article 14, as the case may be, shall apply.

ARTICLE 22
CAPITAL

1. Capital represented by immovable property, as defined in paragraph 2 of Article 6, may be taxed in the Contracting State in which such property is situated.

2. Shares or other corporate rights referred to in paragraph 4 of Article 6 may be taxed in the Contracting State in which the immovable property owned by the company is situated.

3. Capital represented by movable property forming part of the business property of a permanent establishment of an enterprise, or by movable property pertaining to a fixed base for the performance of independent personal services, may be taxed in the Contracting State in which the permanent establishment or fixed base is situated.

4. Ships and aircraft operated in international traffic, and movable property pertaining to the operation of such ships and aircraft, shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.

5. All other elements of capital of a resident of a Contracting State shall be taxable only in that State.

ARTICLE 23
PERSONAL ALLOCANCES

1. Individuals who are residents of Finland may claim the same personal allowance, reliefs and reductions for the purposes of Zambian nationals who are not residents of Zambia.

2. Individuals who are residents of Zambia may claim the same personal allowances, reliefs and reductions for the purposes of Finnish tax as Finnish nationals who are not residents of Finland.

ARTICLE 24
ELIMINATION OF DOUBLE TAXATION

      (a)   Where a resident of Finland derives income or owns capital which, in accordance with the provisions of this Convention, may be taxed in Zambia, Finland shall, where the provisions of sub-paragraph (b) are not applicable, allow:

      (i)   as a deduction from the taxes on income of that person, an amount equal to the taxes on income paid in Zambia.

      (ii)   as a deduction from the tax on capital of that person, an amount equal to the taxes on capital paid in Zambia.

The deduction in either case shall not; however, exceed that part of the taxes on income or on capital, as computed before the deduction is given, which is appropriate, as the case may be, to the income or the capital which may be taxed in Zambia.

Notwithstanding the provisions of sub-paragraph (a), dividends paid by a company which is a resident of Zambia to a company which is a resident of Finland shall be exempt from Finnish tax to the extent that the dividends would have been exempt from tax under Finnish taxation law if both companies had been residents of Finland.

Notwithstanding any other provision of this Convention, an individual who is a resident of Zambia and under Finnish nation law with respect to the Finnish taxes referred to in article 2 also is regarded as a resident of Finland may be taxed in Finland. However, Finland shall allow any Zambian tax paid on the income or capital as a deduction from Finnish tax in accordance with the provisions of paragraph 1. The provisions of this paragraph shall apply only to nationals of Finland.

Subject to the existing provisions of the law of Zambia regarding the allowance as a credit against Zambian tax of tax payable in a territory outside Zambia and to any subsequent modification of these provisions, which shall not affect the general principle hereof, tax payable under the laws of Finland whether directly or by deduction, on profits, income or chargeable gains from sources within Finland shall be allowed as a credit against any Zambian tax computed by reference to the same profits, income or chargeable gains by reference to which the Finnish tax is computed.

However, in the case of a dividend the credit against Zambian tax shall take into account only such Finnish tax payable in respect thereof as is additional to Finnish tax payable by the company on its profits out of which the dividend is paid and is ultimately borne by the recipient of the dividend.

ARTICLE 25
NON-DISCRIMINATION

1. The nationals of a Contracting State, whether or not they are residents of one of the Contracting States, shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances are or may be subjected.

2. The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities.

This provision shall not be construed as obliging a Contracting State to grant to residents of the other Contracting State any personal allowances, reliefs and reductions for taxation purposes on account of civil status or family responsibilities which it grants to its own residents.

3. Except where the provisions of paragraph 1 of Article 9, paragraph 7 of Article 11, or paragraph 6 of Article 12, apply, interest, royalties and other disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable profits of such enterprise, be deductible under the same condition as if they had been paid to a resident of the first-mentioned State.

Similarly, any debts of an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable capital of such enterprise, be deductible as if they had been contracted to a resident of the first-mentioned State.

4. Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of that first-mentioned State are or may be subjected.

5. In this Article the term “taxation” means taxes of every kind and description.

ARTICLE 26
MUTUAL AGREEMENT PROCEDURE

1. Where a resident of a Contracting State considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with this convention, he may notwithstanding the remedies provided by the national laws of those States, present his case to the competent authority of the Contracting State of which he is a resident or, if his case comes under paragraph 1 of Article 25, to that of the Contracting State of which he is a national. The case must be presented within three years from the first notification of the action giving rise to taxation not in accordance with the Convention.

2. The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at an appropriate solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation which is not in accordance with the Convention. Any agreement reached shall be implemented notwithstanding any time limits in the national laws of the Contracting States.

3. The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Convention. They may also consult together for the elimination of double taxation in cases not provided for in the Convention.

4. The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement in the sense of the preceding paragraphs. When it seems advisable in order to reach agreement to have an oral exchange of opinions, such exchange may take place through a Commission consisting of representatives of the competent authorities of the Contracting States.

ARTICLE 27
EXCHANGE OF INFORMATION

1. The Competent authorities of the Contracting States shall exchange such information as is necessary for the carrying out of this Convention or of the domestic laws of the Contracting States concerning taxes covered by this Convention insofar as the taxation thereunder is not contrary to this Convention. The exchange of information is not restricted by Article 1. Any information received by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) involved in the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes which are the subject of the Convention. Such persons or authorities shall use the information only for such purposes. These persons or authorities may disclose the information in public court proceedings or in judicial decisions.

2. In no case shall the provisions of paragraph 1 be construed so as to impose on one of the Contracting States the obligation:

      (a)   to carry out administrative measures at variance with the laws and the administrative practice of that or of the other Contracting States;

      (b)   to supply particulars which are not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State;

      (c)   to supply information which would disclose any trade business industrial, commercial or professional secret or trade process, or information, the disclosure of which would be contrary to policy (order public).

ARTICLE 28
DIPLOMATIC AND CONSULAR OFFICIALS

Nothing in this Convention shall affect the fiscal privileges of diplomatic or consular officials under the general rules of international law or under the provisions of special agreements.

ARTICLE 29
ENTRY INTO FORCE

1. The Governments of the Contracting States shall notify to each other that the constitutional requirements for the entry into force of this Convention have been complied with.

2. The Convention shall enter into force thirty days after the date of the later of the notifications referred to in paragraph 1 and its provisions shall have effect:

      (a)   in Finland:

      (i)   in respect of taxes withheld at source, to amounts derived on or after 1 January in the calendar year next following the year in which the Convention enters into force;

      (ii)   in respect of other taxes on income, taxes on capital and taxes chargeable for any taxable year beginning on or after 1 January in the calendar year next following the year in which the Convention enters into force;

      (b)   in Zambia with respect to income and chargeable gains for charge years beginning after 31st March in the year following the year in which the Convention enters into force.

ARTICLE 30
TERMINATION

This Convention shall remain in force until terminated by one of the Contracting States. Either Contracting State may terminate the Convention, through diplomatic channels, by giving notice of termination at least six months before the end of any calendar year following after the period of five years from the date on which the Convention enters into force. In such event the Convention shall cease to have effect:

      (a)   in Finland:

      (i)   in respect of taxes withheld at source, to amounts derived on or after 1 January in the calendar year next following the year in which the notice is given;

      (ii)   in respect of other taxes on income, and taxes on capital, to taxes chargeable for any taxable year beginning on or after 1st January in the calendar year next following the year in which the notice is given;

      (b)   in Zambia with respect to income and chargeable gains for charge years beginning after 31st March in the year next following the year in which the notice is given.

PROTOCOL

At the signing today of the Convention between Zambia and Finland for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on Income and on capital the undersigned have agreed upon the following provisions which shall form an integral part of the Convention: with reference to paragraph 1 of Article 4, it is understood that the term “resident of a Contracting State” where that Contracting State is Zambia, includes any person who, under the law of Zambia concerning the taxes to which the Convention applies, is regarded as being a resident of Zambia, notwithstanding that he may not be liable to taxation by reason of his being a resident of Zambia.

CONVENTION FOR THE AVOIDANCE OF DOUBLE TAXATION-FRANCE

GN 370 of 1963,

GN 514 of 1964.

An arrangement has been made with the Government of the United Kingdom of Great Britain and Northern Ireland whereby the Convention between that Government and the Government of the French Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income has been extended to the former Protectorate by and incorporating the terms of the exchange of notes set out in the Schedule.

SCHEDULE

EXCHANGE OF NOTES BETWEEN THE GOVERNMENT OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND AND THE GOVERNMENT OF THE FRENCH REPUBLIC EXTENDING TO THE FEDERATION OF RHODESIA AND NYASALAND THE CONVENTION FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME SIGNED AT PARIS ON DECEMBER 14, 1950.

No. 1

Her Majesty's Ambassador at Paris to the Minister for Foreign Affairs of the French Republic British Embassy, Paris, November 5, 1963. Monsieur le Minister, With reference to the Convention between the United Kingdom of Great Britain and Northern Ireland and France for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, signed at Paris on the 14th of December, 1950, I have the honour to propose on behalf of the Government of the United Kingdom that, in accordance with the provisions of Article XXIII, the above-mentioned Convention should be extended to the Federation of Rhodesia and Nyasaland in the manner, subject to the modifications, and with effect from the dates specified in the Annex to the present Note.*

If the foregoing proposal is acceptable to the French Government, I have the honour to suggest that the present Note with its Annex, and Your Excellency's reply to that effect, should be regarded as constituting the Agreement reached between the two Governments in this matter.

I avail, etc.,

PIERSON DIXON.

ANNEX

I. APPLICATION

   (1) The Convention of the 14th December, 1950, as modified by the present Annex shall apply—

      (a)   as if the Contracting Parties were the Government of France and the Government of the Federation of Rhodesia and Nyasaland;

      (b)   as if the term “United Kingdom” (except where the context otherwise required) meant the Federation of Rhodesia and Nyasaland; and

      (c)   as if the taxes concerned in the Federation of Rhodesia and Nyasaland were the Income Tax, Supertax and Undistributed Profits Tax.

   (2) When the last of those measures shall have been taken in France and in the Federation of Rhodesia and Nyasaland necessary to give the present extension the force of law in France and in the Federation the present extension shall have effect—   (2) By a notification dated December 17, 1963, the French Government informed the United Kingdom Government that these measures had been taken in France.By a similar notification dated December 31, 1963, the United Kingdom Government informed the French Government that the necessary measures were taken in the Federation of Rhodesia and Nyasaland on December 9, 1963.

      (a)   in France as respects taxes charged in respect of the year 1962 and subsequent years;   (b)   in the Federation of Rhodesia and Nyasaland as respects tax on the profits derived from operating ships or aircraft, for the year of assessment beginning on the 1st April, 1953, and for subsequent year of assessment, and, as respects tax on all other income, for the year of assessment beginning on the 1st April, 1962, and for subsequent years of assessment.')">*

   (3) The French Government shall inform the Government of the United Kingdom in writing when the last of the measures necessary, as indicated in paragraph (2), have been taken in France. The Government of the United Kingdom shall inform the French Government in writing when the last of the measures necessary, as indicated in paragraph (2), have been taken in the Federation of Rhodesia and Nyasaland.

   (4) The present extension shall remain in force indefinitely but either of the Contracting Parties may, on or before the 30th June in any calendar year not earlier than the year 1966, give to the other Contracting Party through the diplomatic channel written notice of termination and in such event the present extension shall cease to have effect—

      (a)   in France as respects taxes charged in respect of any year following the calendar year during which the notice is given;

      (b)   in the Federation of Rhodesia and Nyasaland as respects tax for any year of assessment beginning on or after the 1st April in the calendar year next following the date of such notice.

II. MODIFICATIONS

The Convention of the 14th December, 1950, shall apply with the modifications that—

   (1) the words “shall be exempt from United Kingdom surtax” in Article IX shall be understood as though they read “shall not be Liable to tax in the Federation of Rhodesia and Nyasaland at a rate in excess of the rate applicable to a company”; and

   (2) Article XIII shall apply to remuneration, including pensions, paid by or out of funds created by the Government of each of the Territories constituting the Federation, to any individual in respect of services rendered to that Government in the discharge of governmental functions as it applies to similar payments by or out of funds created by the Government of the Federation.

No. 2

The Minister for Foreign Affairs of the French Republic to Her Majesty's Ambassador at Paris

Paris, le 5 November, 1963.

Monsieur l'Ambassadeur,

Par lettre en date de ce jour accompagnée de son annexe dont la traduction figure ci-apr s, vous avez bien voulu me faire savoir ce qui suit:

“Me référant ˆ la convention entre le Royaume-Uni de Grande-Bretagne et d'Irlande du Nord et la France tendant ˆ éviter la double imposition et ˆ prévenir l'évasion fiscale en matiere d'imp(tm)t sur le revenu, signée ˆ Paris le 14 décembre 1950, j'ai l'honneur, au nom du Gouvernement du Royaume-Uni, de proposer, conformément aux dispositions de son Article XXIII, que les dispositions en soient étendues ˆ la Fédération de Rhodésie et du Nyassaland, conformément é l'Annexe é la prˆsente Lettre et sous réserve des modifications et é compter des dates qui y sont indiquées.

   (1) By a notification dated December 17, 1963, the French Government informed the United Kingdom Government that these measures had been taken in France.

By a similar notification dated December 31, 1963, the United Kingdom Government informed the French Government that the necessary measures were taken in the Federation of Rhodesia and Nyasaland on December 9, 1963.

Pour Ie cas o- cette proposition agréerait au Gouvernement francais, je suggU re que la présente Lettre accompagnée de son annexe, et la réponse de Votre Excellence soient reputees constituer l'Accord intervenu entre les deux Gouvernements en cette matiˆre.

ANNEXE

I. APPLICATION

   (1) La Convention du 14 décembre 1950, telle qu'elle est modifiée par la présente annexe, sera applicable:

      (a)   comme si les Parties Contractantes étaient le Gouvernement francais et le Gouvernement de la Fédération de Rhodésie et du Nyassaland;

      (b)   comme si le terme “Royaume-Uni”, ˆ moins que le contexte ne l'exige autrement, désignait la Fédération de Rhodésie et du Nyassaland;

      (c)   comme si les imp(tm)ts visés dans la Fédération de Rhodésie et du Nyassaland étaient l'imp(tm)t sur le revenu, la supertaxe et l'imp(tm)t sur les bénéfices non distribués.

   (2) Lorsque toutes les mesures nécessaires pour donner ˆ la présente extension force de loi en France et dans la Fédération auront été prises en France et dans la Fédération de Rhodésie et du Nyassaland, la présente extension produira ses effets:

      (a)   en France, pour l'établissement des imp(tm)ts exigibles au titre de l'année 1962 et des années subséquentes, et

      (b)   dans la Fédération de Rhodésie et du Nyassaland:

-en ce qui concerne l'établissement des imp(tm)ts frappant les bénéfices provenant de l'exploitation de navires ou d'aéronefs, pour l'année d'imposition commencant le ler avril 1953, ainsi que pour les années d'imposition subséquentes.

-en ce qui concerne l’établissement des imp(tm)ts frappant tous les autres revenus, pour l'année d'imposition commencant le ler avril 1962 ainsi que pour les années d'imposition subséquentes.

   (3) Le Gouvernement francais informera par écrit le Gouvernement du Royaume-Uni lorsque toutes les mesures nécessaires visées au paragraphe (2) auront été prises en France. Le Gouvernement du Royaume-Uni informera par écrit le Gouvernement francais lorsque toutes les mesures nécessaires visées au paragraphe (2), auront été prises dans la Fédération de Rhodésie et du Nyassaland.

   (4) La présente extension demeurera en vigueur sans limitation de durée mais l’une ou l'autre des Parties Contractantes pourra, ˆ partir de 1966, et au plus tard le 30 juin de chaque année civile, notifier par écrit ˆ l'autre Partie Contractante, par la voie diplomatique, qu'elle y met fin. Dans ce cas, la présente extension cessera d'avoir effet:

      (a)   en France, pour L’établissement des imp(tm)ts afférents aux années postérieures ˆ l'année civile au cours de laquelle la notification sera intervenue;

      (b)   dans la Fédération de Rhodésie et du Nyassaland, pour l’établissement de l'imp(tm)t afférent aux années d'imposition commencant le ler avril ou aprés le ler avril de l'année civile suivant immédiatement Ia date d'une telle notification.

II. MODIFICATIONS

La Convention du 14 décembre 1950 sopliquera avec les modifications suivantes:

   (1) Les termes “sont exempts de la surtaxe du Royaume-Uni” figurant ˆ l'Article IX de la Convention seront interprétés comme significant “ne sont pas passibles de l'imp(tm)t ans la Fédération de Rhodésie et du Nyassaland ˆ un taux supér ur ˆ celui qui st applicable ˆ une société'; et

   (2) l'Article XIII sera applicable aux rémunérations y compris les pensions, versées par le Gouvernement de chacun des territories constituant la Fédération on sur des fonds créés par le Gouvernement de chacun desdits territories, ˆ toute personne en contrepartie de services rendus audit Gouvernement dans l'exercise de fonctions officielles, de mˆme qu'il s'applique aux payements similaires effectués par le Gouvernement de la Fédération ou sur des fonds créés par ledit Gouvernement.”

J'ai l'honneur de porter ˆ la connaissance de Votre Excellence que les termes de la Lettre qui précéde et de son annexe recontrent l'agrément du Gouvernement francais. Celle-ci et al présente réponse constituent l'accord recherché par nos deux Gouvernements.

Veuillez agréer, etc.,

FR. LEDUC.

      (Translation of No. 2) Paris, November 5, 1963. Monsieur l'Ambassadeur, By a letter of today's date accompanied by an annex, the translation of which is given below, you have informed me as follows:

      (As in No. 1)

I have the honour to inform Your Excellency that the terms of the preceding letter and its Annex are acceptable to the French Government and together with this reply constitute an Agreement between our two Governments.

Please accept, etc.,

FR. LEDUC.

ANNEXURE

CONVENTION BETWEEN HIS MAJESTY IN RESPECT OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND AND THE PRESIDENT OF THE FRENCH REPUBLIC FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME.

His Majesty the King of Great Britain, Ireland and the British Dominions beyond the Seas and the President of the French Republic, Desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, Have appointed for that purpose as their Plenipotentiaries:

His Majesty the King of Great Britain, Ireland and the British Dominions beyond the Seas: For the United Kingdom of Great Britain and Northern Ireland:

His Excellency Sir Oliver Charles Harvey, G.C.M.G., G.C.V.O., C.B., His Ambassador Extraordinary and Plenipotentiary in Paris; The President of the French Republic:

His Excellency Monsieur Alexandre Parodi, Ambassador of the French Republic, General Secretary for Foreign Affairs; Who, having exhibited their respective full powers, found in good and due form, have agreed as follows:

ARTICLE I

1. The taxes which are the subject of the present Convention are:

      (a)   In France:

The tax on the income of individuals (proportional tax and progressive surtax), the tax on the income of companies and the tax on undistributed profits under Article 14 of the Law of 31st January, 1950 (hereinafter referred to as “French tax”);

      (b)   In the United Kingdom of Great Britain and Northern Ireland:

The income tax (including surtax) and the profits tax (hereinafter referred to as “United Kingdom tax”).

2. The present Convention shallalso apply to any other taxes of a substantially similar character imposed in France or the United Kingdom subsequently to the date of signature of the present Convention.

ARTICLE II

1. In the present Convention, unless the context otherwise requires—

      (a)   The term “United Kingdom” means Great Britain and Northern Ireland, excluding the Channel Islands and the Isle of Man;

      (b)   The term “France” means metropolitan France, and excludes Algeria, the overseas departments, and other territories of the French Union;

      (c)   The terms “one of the territories” and “the other territory” mean the United Kingdom or France, as the context requires;

      (d)   The term “tax” means United Kingdom tax or French tax, as the context requires;

      (e)   The term “person” means—

      (i)   any physical person;

      (ii)   any unincorporated body of physical persons; and

      (iii)   any body corporate;

      (f)   The term “company” means any body corporate;

      (g)   The terms “resident of the United Kingdom” and “resident of France” mean respectively any person who is resident in the United Kingdom for the purposes of United Kingdom tax and who has not his fiscaldomicile for the purposes of French tax in France and any person whose fiscaldomicile for the purposes of French tax is in France and who is not resident in the United Kingdom for the purposes of United Kingdom tax; a company shall be regarded as resident in the United Kingdom if its business is managed and controlled in the United Kingdom and as having its fiscaldomicile in France if its business is managed and controlled in France;

      (h)   The terms “resident of one of the territories” and “resident of the other territory” mean a person who is a resident of the United Kingdom or a person who is a resident of France as the context requires;

      (i)   The terms “United Kingdom enterprise” and “French enterprise” mean respectively an industrial or commercial enterprise or undertaking carried on by a resident of the United Kingdom and an industrial or commercial enterprise or undertaking carried on by a resident of France; and the terms “enterprise of one of the territories” and “enterprise of the other territory” mean a United Kingdom enterprise or a French enterprise, as the context requires;

      (j)   The term “industrial or commercial profits” includes in particular profits arising from the business of insurance companies, banks, and other financial enterprises;

      (k)   The term “permanent establishment”, when used with respect to an enterprise of one of the territories, means a branch, management, factory, or other fixed place of business in which is exercised, in whole or in part, the activity of the enterprise, but does not include an agency unless the agent has, and habitually exercises, a General authority to negotiate and conclude contracts on behalf of such enterprise or has a stock of merchandise from which he regularly fills orders on its behalf. In this connection—

      (i)   An enterprise of one of the territories shall not be deemed to have a permanent establishment in the other territory merely because it carries on business dealings in that other territory through a bona fide broker or General commission agent acting in the ordinary course of his business as such;

      (ii)   The fact that an enterprise of one of the territories maintains in the other territory a fixed place of business exclusively for the purchase of goods or merchandise shall not of itself constitute that fixed place of business a permanent establishment of the enterprise;

      (iii)   The fact that a company which is a resident of one of the territories has a subsidiary company which is a resident of the other territory or which carries on a trade or business in that other territory (whether through a permanent establishment or otherwise) shall not of itself constitute that subsidiary company a permanent establishment of its parent company;

      (l)   The term “taxation authorities” means, in the case of the United Kingdom, the Commissioner-Generals of InIand Revenue or their authorised representative; in the case of France, the Director General of Taxes (Directeur GénéraI des Imp(tm)ts) or his authorised representative; and, in the case of any territory to which the present Convention is extended under Article XXIII, the competent authority for the administration in such territory of the taxes to which the present Convention applies.

2. Where the present Convention provides that income from a source in one of the territories shall be exempt from tax in that territory if (with or without other conditions) it is subject to tax in the other territory, and under the Law in force in that other territory the said income is subject to tax by reference to the amount thereof which is remitted to or received in that other territory and not by reference to the full amount thereof, then the exemption to be allowed under this Convention in the first-mentioned territory shall apply only to so much of the income as is remitted to or received in the other territory.

3. In the application of the provisions of the present Convention by one of the High Contracting Parties any term not otherwise defined shall unless the context otherwise requires, have the meaning which it has under the Laws in force in the territory of that Party relating to the taxes which are the subject of the present Convention.

ARTICLE III

1. The industrial or commercial profits of a United Kingdom enterprise shall not be subject to French tax unless the enterprise carries on a trade or business in France through a permanent establishment situated therein. If it carries on a trade or business as aforesaid, tax may be imposed on those profits by France but only on so much of them as is attributable to that permanent establishment: provided that nothing in this paragraph shall affect the provisions of the Law of France, as it stands at the date of signature of this Convention, as respects the taxation of profits of non-residents from the business of insurance.

2. The industrial or commercial profits of a French enterprise shall not be subject to United Kingdom tax unless the enterprise carries on a trade or business in the United Kingdom through a permanent establishment situated therein. If it carries on a trade or business as aforesaid, tax may be imposed on those profits by the United Kingdom, but only on so much of them as is attributable to that permanent establishment.

3. Where an enterprise of one of the territories carries on a trade or business in the other territory through a permanent establishment situated therein, there shall be attributed to that permanent establishment the industrial or commercial profits which it might be expected to derive in that other territory if it were an independent enterprise engaged in the same or similar activities under the same or similar conditions and dealing at arm's Length with the enterprise of which it is a permanent establishment.

4. Where an enterprise of one of the territories derives profits, under contracts concluded in that territory, from sales of goods or merchandise stocked in a warehouse in the other territory for convenience of delivery and not for purposes of display, those profits shall not be attributed to a permanent establishment of the enterprise in that other territory, notwithstanding that the offers of purchase have been obtained by an agent in that other territory and transmitted by him to the enterprise for acceptance.

5. No portion of any profits arising to an enterprise of one of the territories shall be attributed to a permanent establishment situated in the other territory by reason of the mere purchase of goods or merchandise within that other territory by the enterprise.

ARTICLE IV

A company which is a resident of the United Kingdom and which carries on a trade or business in France through a permanent establishment situated therein and which is Liable to the tax on income from movablecapital under Article 39, paragraph 11 of the Decree No. 48-1986, of 9th December, 1948, shall not be charged to that tax on income exceeding the amount of the profits or gains arising in France and chargeable in accordance with Article III.

ARTICLE V

Where—

      (a)   an enterprise of one of the territories participates directly or indirectly in the management, controlor capital of an enterprise of the other territory, or

      (b)   the same persons participate directly or indirectly in the management, controlor capital of an enterprise of one of the territories and an enterprise of the other territory, and in either case, conditions are made or imposed between the two enterprises, in their commercial or financialrelations, which differ from those which would be made between independent enterprises, then any profits which would but for those conditions have accrued to one of the enterprises but by reason of these conditions have not so accrued may be included in the profits of that enterprise and taxed accordingly.

ARTICLE VI

Where a company which is a resident of the United Kingdom derives industrial and commercial profits from a permanent establishment in France, and these profits are chargeable both to the tax on undistributed profits under Article 14 of the Law of 31st January, 1950, and to the tax on income from movable capital, the incidence of these two taxes shall not result in a total charge greater than 10 per centum on the amount of the profits chargeable to these two taxes in accordance with Article III. In consequence, the rate of the tax on income from movable capital shall be reduced to 10 per centum.

If, hereafter, the tax on undistributed profits is not imposed, or if it is imposed at a rate different from the rate in force at the date of signature of the present Convention, the taxation authorities of the two High Contracting Parties shall consult together in that event with a view to fixing the appropriate rate of the tax on income from movable capital.

ARTICLE VII

Profits distributed by a company which is a resident of France to a company which is a resident of the United Kingdom and which has owned for a year registered shares (actions ou parts d'intérˆt) representing at least 50 per centum of the capital of the former company shall be charged to the tax on income from movable capital at the rate determined in accordance with Article VI.

ARTICLE VIII

Notwithstanding the provisions of Article III, IV V and VI, profits which a resident of one of the territories derives from operating ships or aircraft shall be exempt from tax in the other territory.

ARTICLE IX

Dividends and interest paid by a company which is a resident of the United Kingdom to a resident of France, who is subject to tax in France in respect thereof and does not carry on trade or business in the United Kingdom through a permanent establishment situated therein, shall be exempt from United Kingdom surtax.

ARTICLE X

1. Any royalty derived from sources within one of the territories by a resident of the other territory, who is subject to tax in that other territory in respect thereof and does not carry on a trade or business in the first-mentioned territory through a permanent establishment situated therein, shall be exempt from tax in that first-mentioned territory.

2. In this Article the term “royalty” means any royalty or other amount paid as consideration for the use of, or for the privilege of using, any copyright, patent, design, secret process or formula, trade mark or other like property, and includes rents in respect of cinematograph films, but does not include any royalty or other amount paid in respect of the operation of a mine or quarry or of any other extraction of natural resources.

3. Where any royalty exceeds a fair and reasonable consideration in respect of the rights for which it is paid, the exemption provided by the present Article shall apply only to so much of the royalty as represents such fair and reasonable consideration.

4. Any capital sum derived from sources within one of the territories from the sale of patent rights by a resident of the other territory, who does not carry on a trade or business in the first- mentioned territory through a permanent establishment situated therein, shall be exempt from tax in that first-mentioned territory.

ARTICLE XI

A resident of one of the territories who does not carry on a trade or business in the other territory through a permanent establishment situated therein shall be exempt in that other territory from any tax in respect of gains from the sale, transfer, or exchange of capital assets.

ARTICLE XII

1. Income derived from real property in one of the territories by a resident of the other territory shall be subject to tax in accordance with the Laws of the first-mentioned territory. Where the income is also subject to tax in the other territory, relief from double taxation shall be given in accordance with the provisions of Article XX.

2. In this Article, the term “income from real property” means income of whatever nature derived from reaI property, and includes royalties or any other amounts paid in respect of the operation of mines or quarries or any other extraction of natural resources.

ARTICLE XIII

1. Remuneration, including pensions, paid by or out of funds created by one of the High Contracting Parties to any individual for services rendered to that Party in the discharge of governmental functions shall be exempt from tax in the territory of the other High Contracting Party, unless the individual is a national of that other Party without being also a national of the first-mentioned Party.

2. The following pensions shall be exempt from United Kingdom tax, regardless of the nationality of the pensioner, so long as they are exempt from French tax:

      (a)   Pensions granted by virtue of the Law of the 31st March, 1919, to all those persons who since the 2nd August, 1914, have become entitled to military pensions by reason of disabilities resulting whether from hostilities or from ailments or accidents occurring on service;

      (b)   Pensions granted by virtue of the combined provisions of the Law of the 31st March, 1919, and of Article 1 of the Law of the 22nd June, 1927, to retired soldiers and sailors by reason of wounds received or disabilities or ailments contracted on service before the 2nd August, 1914:

Provided that paragraph 1 of this Article shall apply to such part of the mixed pensions provided for in Article 60-2ø of the Law of the 31st March, 1919, as relates to Length of service and is not exempted from French tax.

3. The following pensions shall be exempt from French tax, regardless of the nationality of the pensioner, so long as they are exempt from United Kingdom tax:

      (a)   Wounds pensions granted to members of the naval, military or air forces of the Crown;

      (b)   Retired pay of disabled officers granted on account of medical unfitness attributable to or aggravated by naval, military or air force service;

      (c)   Disablement or disability pensions granted to members, other than commissioned officers, of the naval, military or air forces of the Crown on account of medical unfitness attributable to or aggravated by naval, military or air force service;

      (d)   Disablement pensions granted to persons who have been employed in the nursing services of any of the naval, military or air forces of the Crown on account of medical unfitness attributable to or aggravated by naval, military or air force service;

      (e)   Injury and disablement pensions payable under any scheme made under the Injuries in War (Compensation) Act, 1914, the Injuries in War Compensation Act, 1914 (Session 2), the Injuries in War (Compensation) Act, 1915, the Pensions (Navy, Army, Air Force and Mercantile Marine) Act, 1939, the Personal Injuries (Emergency Provisions) Act, 1939, or under any War Risks Compensation Scheme for the Mercantile Marine:

Provided that paragraph 1 of this Article shall apply to such part of any income from those pensions as is not exempted from United Kingdom tax.

4. The provisions of paragraph 1 of this Article shall not apply to payments in respect of services rendered in connection with any trade or business carried on by either of the High Contracting Parties for purposes of profit.

ARTICLE XIV

1. An individual who is a resident of the United Kingdom shall be exempt from French tax on profits or remuneration in respect of personal (including professional) services performed within France in any year of assessment if—

      (a)   he is present within France for a period or periods not exceeding in the aggregate 183 days during that year, and

      (b)   —

      (i)   in the case of an employment, the services are performed on behalf of a person who is a resident of the United Kingdom;

      (ii)   in other cases, he has no office or other fixed place of business in France; and

      (c)   the profits or remuneration are subject to United Kingdom tax.

2. An individual who is a resident of France shall be exempt from United Kingdom tax on profits or remuneration in respect of personal (including professional) services performed within the United Kingdom in any year of assessment if—

      (a)   he is present within the United Kingdom for a period or periods not exceeding in the aggregate 183 days during that year; and

      (b)   —

      (i)   in the case of an employment, the services are performed on behalf of a person who is a resident of France;

      (ii)   in other cases, he has no office or other fixed place of business in the United Kingdom; and

      (c)   the profits or remuneration are subject to French tax.

3. The provisions of this Article shall not apply to the profits or remuneration of public entertainers such as stage, motion picture or radio artists, musicians and athletes.

ARTICLE XV

1. Any pension (other than a pension of the kind referred to in paragraph 1 or 2 of Article XIII) and any annuity, derived from sources within France by an individual who is a resident of the United Kingdom and subject to United Kingdom tax in respect thereof, shall be exempt from French tax.

2. Any pension (other than a pension of the kind referred to in paragraph 1 or 3 of Article XIII) and any annuity, derived from sources within the United Kingdom by an individual who is a resident of France and subject to French tax in Respect thereof, shall be exempt from United Kingdom tax.

3. The term “annuity” means a stated sum payable periodically at stated times, during life or during a specified or ascertainable period of time, under an obligation to make the payments in return for adequate and full consideration in money or money's worth.

ARTICLE XVI

Nothing in the present Convention shall affect the provisions of the Code General des Imp(tm)ts regarding the tax payable by individuals who have not their fiscal domicile in France, but have a residence in France. Subject to these provisions, a resident of the United Kingdom shall not be chargeable to French progressive surtax in respect of income from sources in France.

ARTICLE XVII

A professor or teacher from one of the territories who receives remuneration for teaching, during a period of temporary residence not exceeding two years, at a university, college, school or other educational institution in the other territory, shall be exempt from tax in that other territory in respect of that remuneration.

ARTICLE XVIII

A student or business apprentice from one of the territories who is receiving full-time education or training in the other territory shall be exempt from tax in that other territory on payments made to him by persons resident in the first-mentioned territory for the purposes of his maintenance, education or training.

ARTICLE XIX

In the application of paragraph 4 of Article XXII, the High Contracting Parties have agreed as follows:

   (1) Individuals who are residents of France shall be entitled to the same personal allowances, reliefs and reductions for the purposes of United Kingdom income tax as British subjects not resident in the United Kingdom.

   (2) Individuals who are residents of the United Kingdom shall be entitled for the purposes of French tax to the same reductions of taxes or charges, basic abatements, and allowances on account of family responsibilities as French nationals.

ARTICLE XX

1. The Laws of the High Contracting Parties shall continue to govern the taxation of income arising in either of the territories, except where express provision to the contrary is made in the present Convention. Where income is subject to tax in both territories, relief from double taxation shall be given in accordance with the following paragraphs:

2. Subject to the provisions of the Law of the United Kingdom regarding the allowance as a credit against United Kingdom tax of tax payable in a territory outside the United Kingdom, French tax payable, whether directly or by deduction, in respect of income from sources within France shall be allowed as a credit against any United Kingdom tax payable in respect of that income. Where such income is a dividend paid by a company resident in France to a company resident in the United Kingdom which controls, directly or indirectly, not less than one-half of the voting power in the former company, the credit shall take into account (in addition to any French tax appropriate to the dividend) the French tax payable by the company in respect of its profits.

3.

      (a)   Subject to the provisions of sub-paragraph (b) of this paragraph, income derived by a person who is a resident of France (whether or not that person is resident in the United Kingdom for the purposes of United Kingdom tax) from sources in the United Kingdom which, under the Laws of the United Kingdom and in accordance with this Convention, is subject to tax in the United Kingdom either directly or by deduction, shall be exempt from the French proportional tax on the income of individuals, or, as the case may be, from French tax on companies.

      (b)   Where the income consists of dividends or interest derived from a company which is a resident of the United Kingdom by a person who is a resident of France (whether or not that person is resident in the United Kingdom for the purposes of United Kingdom tax) and the income is subject to United Kingdom tax, either directly or by deduction, it shall be exempt from the French tax on income from movable capital, United Kingdom tax being regarded as wholly covering that tax in view of its rate.

      (c)   In the cases referred to in sub-paragraph (a) of this paragraph, the income shall be exempt from French progressive surtax but, where the person receiving this income is a resident of France, the income may be taken into account in determining the effective rate of progressive surtax surgeable on his income other than the income referred to.

4. For the purposes of this Article, profits or remuneration for personal (including professional) services performed in one of the territories shall be deemed to be income from sources within that territory, and the services of an individual whose services are wholly or mainly performed in ships or aircraft operated by a resident of one of the territories shall be deemed to be performed in that territory.

ARTICLE XXI

The taxation authorities of the High Contracting Parties shall exchange such information (being information which is at their disposaI under their respective taxation Laws in the normaI course of administration) as is necessary for carrying out the provisions of the present Convention or for the prevention of fraud or for the administration of statutory provisions against IegaI avoidance in reIation to the taxes which are the subject of the present Convention. Any information so exchanged shall be treated as secret and shall not be discIosed to any persons other than those concerned with the assessment and coIIection of the taxes which are the subject of the present Convention. No information as aforesaid shall be exchanged which wouId discIose any trade, business, industrial or professionaI secret or trade process.

ARTICLE XXII

1. The nationaIs of one of the High Contracting Parties shall not be subjected in the territory of the other High Contracting Party to any taxation or any requirement connected therewith which is other, higher or more burdensome than the taxation and connected requirements to which the nationaIs of the Iatter Party are or may be subjected.

2. The enterprises of one of the territories shall not be subjected in the other territory, in respect of profits or capital attributable to their permanent establishments in that other territory, to any taxation which is other, higher or more burdensome than the taxation to which the enterprises of that other territory are or may be subjected in respect of the like profits or capital.

3. The income, profits and capital of an enterprise of one of the territories, the capital of which is whoIIy or partIy owned or controIIed, directly or indirectly, by a resident or residents of the other territory shall not be subjected in the first-mentioned territory to any taxation which is other, higher or more burdensome than the taxation to which other enterprises of that first- mentioned territory are or may be subjected in respect of the like income, profits and capital.

4. Nothing in paragraph 1 or 2 of this Article shall be construed as obIiging either High Contracting Party to grant to nationaIs of the other High Contracting Party, who are not resident in the territory of the former High Contracting Party, any personaI allowances, reIiefs or reductions for tax purposes. Each of the High Contracting Parties shall adhere to its own IegisIation in this respect, subject to any speciaI agreements which may be made between them determining the arrangements to be appIied.

5. In this Article the term “nationaIs” means—

      (a)   in reIation to France all French subjects and French protected persons residing in France or in any French territory to which the present Convention applies by reason of extension made under Article XXIII and all IegaI persons, partnerships and associations deriving their status as such from the Law in force in any French territory to which the present Convention applies;

      (b)   in reIation to the United Kingdom, all British subjects and British protected persons residing in the United Kingdom or in any British territory to which the present Convention applies by reason of extension made under Article XXIII and all IegaI persons, partnerships and associations deriving their status as such from the Law in force in any British territory to which the present Convention applies.

6. In this Article the term “taxation” means taxes of every kind and description Ievied on behalf of any authority whatsoever.

ARTICLE XXIII

1. The present Convention may be extended, either in its entirety or with modifications, to any territory of one of the High Contracting Parties to which this Article applies and which imposes taxes substantially similar in character to those which are the subject of the present Convention, and any such extensions shall take effect from such date and subject to such modifications and conditions (including conditions as to termination) as may be specified and agreed between the High Contracting Parties in notes to be exchanged for this purpose.

2. The termination in respect of France or the United Kingdom of the present Convention under Article XXVI shall, unless otherwise expressIy agreed by both High Contracting Parties, terminate the application of the present Convention to any territory to which the Convention has been extended under this ArticIe.

3. The territories to which this Article applies are—

      (a)   in reIation to His Majesty the King of Great Britain, Ireland and the British Dominions beyond the Seas:

Any territory other than the United Kingdom for whose internationaI relations the United Kingdom is responsibIe;

      (b)   in reIation to the President of the French Republic:

Any department, protectorate or other overseas territory, for whose internationaI relations France is responsibIe.

ARTICLE XXIV

On the entry into force of the present Convention the following agreements between the High Contracting Parties shall be terminated in respect of the territories to which the Convention applies:

   (1) The agreement constituted by Exchange of Notes dated the 1st October, 1932, for the exemption from taxation of profits accruing from the business of shipping;

   (2) The Agreement dated the 9th April, 1935, for the reciprocaI exemption from income tax of profits arising from the business of air transport;

   (3) The Agreement dated the 19th October, 1945, for reIief from double taxation in certain circumstances, excIusive of the ProtocoI of Signature to that Agreement;

and the provisions of those Agreements (other than the ProtocoI of Signature to the Iast- mentioned Agreement) shall cease to have effect:

      (a)   In the United Kingdom, as respects income tax for the year of assessment beginning on the 6th April, 1950, and subsequent years, and as respects surtax for the year of assessment beginning on the 6th April, 1949, and subsequent years;

      (b)   In France, as respects taxes charged in respect of the year 1950 and subsequent years.

ARTICLE XXV

1. The present Convention shall be ratified and the instruments of ratification shall be exchanged at London as soon as possibIe.

2. The present Convention shall enter into force upon exchange of ratifications and the foregoing provisions thereof shall have effect:

      (a)   In the United Kingdom: 1950;

as respects income tax for any year of assessment beginning on or after the 6th April, and as respects surtax for any year of assessment beginning on or after the 6th April, 1949;

as respects profits tax in respect of the following profits:

      (i)   profits arising in any chargeable accounting period beginning on or after the 1st April, 1950;

      (ii)   profits attributable to so much of any chargeable accounting period falling partIy before and partIy after that date as falls after that date;

      (iii)   profits not so arising or attributable by reference to which income tax is, or but for the present Convention wouId be, chargeable for any year of assessment beginning on or after the 6th April, 1950;

      (b)   In France:

as respects taxes charged in respect of the year 1950 and subsequent years, and as respects the undistributed profits tax. NevertheIess, so far as income other than that referred to in Article X of the present Convention is concerned, no repayment shall be made of tax on income from movable capital, which has been deducted in France at the time of payment of the said income and before the date of exchange of ratifications of the present Convention.

ARTICLE XXVI

The present Convention shall continue in force indefiniteIy but either of the High Contracting Parties may, on or before the 30th June in any calendar year not earIier than the year 1954, give to the other High Contracting Party, through dipIomatic channeIs, written notice of termination and, in such event, the present Convention shall cease to be effective:

      (a)   In the United Kingdom:

as respects income tax for any year of assessment beginning on or after the 6th April in the calendar year next following that in which the notice is given;

as respects surtax for any year of assessment beginning on or after the 6th April in the calendar year in which the notice is given; and

as respects profits tax in respect of the following profits:

      (i)   profits arising in any chargeable accounting period beginning on or after the 1st April in the calendar year next following that in which the notice is given;

      (ii)   profits attributable to so much of any chargeable accounting period falling partIy before and partIy after that date as falls after that date;

      (iii)   profits not so arising or attributable by reference to which income tax is chargeable for any year of assessment beginning on or after the 6th April in the next following calendar year;

      (b)   In France:

as respects taxes charged in respect of the year following the calendar year during which the said notice is given.

   

DOUBLE TAXATION RELIEF (TAXES ON INCOME) (UNITED KINGDOM) ORDER

[Section 74]

Arrangement of Paragraphs

   Paragraph

   1.   Title

   2.   Convention

      SCHEDULE

SI 89 of 1973.

1.   Title

This Order may be cited as the Double Taxation ReIief (Taxes on Income) (United Kingdom) Order.

2.   Convention

It is hereby decIared that the Convention, the text of which is set out in the ScheduIe to this Order, being a Convention relating to reIief from double taxation on income made between the Government of the Republic of Zambia and the Government of the United Kingdom shall have effect in Zambia in accordance with section 74 of the Income tax Act.

SCHEDULE

CONVENTION BETWEEN THE GOVERNMENT OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND AND THE GOVERNMENT OF THE REPUBLIC OF ZAMBIA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND CAPITAL.

The Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Republic of Zambia, Desiring to conclude a Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and Capital, Have agreed as foIIows:

ARTICLE 1
PERSONAL SCOPE

This Convention shall apply to persons who are residents of one or both of the Contracting States.

ARTICLE 2
TAXES COVERED

   (1) The taxes which are the subject of this Convention are—

      (a)   in the United Kingdom of Great Britain and Northern Ireland:

      (i)   the income tax (including surtax);

      (ii)   the corporation tax; and

      (iii)   the capital gains tax;

      (b)   in Zambia: x

      (i)   the income tax;

      (ii)   the mineraI royalty tax; and

      (iii)   the personaI Ievy.

   (2) This Convention shall also apply to any identicaI or substantially similar taxes which are imposed by either Contracting State after the date of signature of this Convention in addition to, or in place of, the existing taxes.

   (3) The competent authorities of the Contracting States shall notify to each other any changes which are made in their respective taxation Laws.

ARTICLE 3
GENERAL DEFINITIONS

   (1) In this Convention, unless the context otherwise requires—

      (a)   the term “United Kingdom” means Great Britain and Northern Ireland, including any area outside the territoriaI sea of the United Kingdom which in accordance with internationaI Law has been or may hereafter be designated, under the Laws of the United Kingdom concerning the ContinentaI SheIf, as an area within which the rights of the United Kingdom with respect to the sea bed and sub-soiI and their naturaI resources may be exercised;

      (b)   the term “Zambia” means the Republic of Zambia;

      (c)   the term “nationaI” means—

      (i)   in reIation to the United Kingdom, all citizens of the United Kingdom and CoIonies who derive their status as such from their connection with the United Kingdom and all IegaI persons, partnerships and associations deriving their status as such from the Law in force in the United Kingdom;

      (ii)   in reIation to Zambia, all citizens of Zambia and all IegaI persons, partnerships and associations deriving their status as such from the Law in force in Zambia;

      (d)   the term “United Kingdom tax” means tax imposed by the United Kingdom being tax to which this Convention applies by virtue of the provisions of Article 2; the term “Zambia tax” means tax imposed by Zambia being tax to which this Convention applies by virtue of the provisions of Article 2;

      (e)   the term “tax” means United Kingdom tax or Zambia tax, as the context requires;

      (f)   the terms “a Contracting State” and “the other Contracting State” mean the United Kingdom or Zambia, as the context requires;

      (g)   the term “persons” comprises an individual, a company and any other body of persons;

      (h)   the term “company” means any body corporate or any entity which is treated as a body corporate for tax purposes;

      (i)   the terms “enterprise of a Contracting State” and “enterprise of the other Contracting State” mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State;

      (j)   the term “competent authority” means, in the case of the United Kingdom the Commissioner-Generals of InIand Revenue or their authorised representative, and in the case of Zambia, the Commissioner-General of Taxes or his authorised representative.

   (2) As regards the application of this Convention by a Contracting State any term not otherwise defined shall, unless the context otherwise requires, have the meaning which it has under the Laws of that Contracting State relating to the taxes which are the subject of this Convention.

ARTICLE 4
FISCAL DOMICILE

   (1) For the purposes of this Convention, the term “resident of a Contracting State” means, subject to the provisions of paragraphs (2) and (3) of this ArticIe, any person who, under the Law of that State, is Liable to taxation therein by reason of his domicile, residence, place of management or any other criterion of a similar nature. The terms “resident of the United Kingdom” and “resident of Zambia” shall be construed accordingly.

   (2) Where by reason of the provisions of paragraph (1) of this Article an individual is a resident of both Contracting States, then his status shall be determined in accordance with the following ruIes:

      (a)   he shall be deemed to be a resident of the Contracting State in which he has a permanent home avaliable to him. If he has a permanent home avaliable to him in both Contracting States, he shall be deemed to be a resident of the Contracting State with which his personaI and economic relations are cIosest (centre of vitaI interests);

      (b)   if the Contracting State in which he has his centre of vitaI interests cannot be determined, or if he has not a permanent home avaliable to him in either Contracting State, he shall be deemed to be a resident of the Contracting State in which he has an habituaI abode;

      (c)   if he has an habituaI abode in both Contracting States or in neither of them, he shall be deemed to be a resident of the Contracting State of which he is a nationaI;

      (d)   if he is a nationaI of both Contracting States or of neither of them, the competent authorities of the Contracting States shall settIe the question by mutuaI agreement.

   (3) Where by reason of the provisions of paragraph (1) of this Article a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident of the Contracting State in which its place of effective management is situated.

ARTICLE 5
PERMANENT ESTABLISHMENT

   (1) For the purposes of this Convention, the term “permanent establishment” means a fixed place of business in which the business of the enterprise is whoIIy or partIy carried on.

   (2) The term “permanent establishment” shall include especially—

      (a)   a place of management;

      (b)   a branch;

      (c)   an office;

      (d)   a factory;

      (e)   a workshop;

      (f)   a mine, quarry or other place of extraction of naturaI resources;

      (g)   a buiIding site or construction or assembIy project which exists for more than six months.

   (3) The term “permanent establishment” shall not be deemed to include—

      (a)   the use of faciIities soIeIy for the purpose of storage, display or delivery of goods or merchandise beIonging to the enterprise;

      (b)   the maintenance of a stock of goods or merchandise beIonging to the enterprise soIeIy for the purpose of storage, display or delivery;

      (c)   the maintenance of a stock of goods or merchandise beIonging to the enterprise soIeIy for the purpose of processing by another enterprise;

      (d)   the maintenance of a fixed place of business soIeIy for the purpose of purchasing goods or merchandise, or for coIIecting information, for the enterprise;

      (e)   the maintenance of a fixed place of business soIeIy for the purpose of advertising for the suppIy of information, for scientific research or for similar activities which have a preparatory or auxiIiary character, for the enterprise.

   (4) An enterprise of a Contracting State shall be deemed to have a permanent establishment in the other Contracting State if—

      (a)   it carries on the activity of providing the services within that other Contracting State of pubIic entertainers or athIetes referred to in Article 18; or

      (b)   it carries on supervisory activities in that other Contracting State for more than six months in connection with a construction, installation or assembIy project which is being undertaken in that other Contracting State.

   (5) A person acting in a Contracting State on behalf of an enterprise of the other Contracting State—other than an agent of an independent status to whom the provisions of paragraph (6) of this Article appIy—shall be deemed to be a permanent establishment in the first-mentioned State if he has, and habitually exercises in that State, an authority to conclude contracts in the name of the enterprise, unless his activities are Iimited to the purchase of goods or merchandise for the enterprise.

   (6) An enterprise of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other State through a broker, General commission agent or any other agent of an independent status, where such persons are acting in the ordinary course of their business.

   (7) The fact that a company which is a resident of a Contracting State controIs or is controIIed by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other.

ARTICLE 6
LIMITATION OF RELIEF

Where under any provision of this Convention any person is reIieved from tax in a Contracting State on certain income if (with or without other conditions) that person is subject to tax in the other Contracting State in respect of that income and that person is subject to tax in respect of that income in that other State by reference to the amount thereof which is remitted to or received in that other State, the reIief from tax to be allowed under this Convention in the first- mentioned Contracting State shall apply only to the amounts so remitted or received.

ARTICLE 7
INCOME FROM IMMOVABLE PROPERTY

   (1) Income from immovable property may be taxed in the Contracting State in which such property is situated.

   (2) —

       (a)   The term “immovable property” shall, subject to the provisions of sub-paragraph (b) below, be defined in accordance with the Law of the Contracting State in which the property in question is situated.

      (b)   The term “immovable property” shall in any case include property accessory to immovable property, Iivestock and equipment used in agricuIture and forestry, rights to which the provisions of General Law respecting Ianded property appIy, usufruct of immovable property and rights to variabIe or fixed payments as consideration for the working of, or the right to work, mineraI deposits, sources and other naturaI resources; ships, boats and aircraft shall not be regarded as immovable property.

   (3) The provisions of paragraph (1) of this Article shall apply to income derived from the direct use, Ietting, or use in any other form of immovable property.

   (4) The provisions of paragraphs (1) and (3) of this Article shall also apply to the income from immovable property of an enterprise and to income from immovable property used for the performance of professionaI services.

   (5) Notwithstanding the preceding provisions of this Article profits derived by an agricuIturaI, forestry or pIantation enterprise shall be deaIt with in accordance with the provisions of Article 8.

ARTICLE 8
BUSINESS PROFITS

   (1) The profits of an enterprise of a Contracting State shall be taxabIe only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is attributable to that permanent establishment.

   (2) Where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing at arm's Length with the enterprise of which it is a permanent establishment.

   (3) In the determination of the profits of a permanent establishment, there shall be allowed as deductions expenses of the enterprise (other than expenses which wouId not be deductibIe if the permanent establishment were a separate enterprise) which are incurred for the purposes of the permanent establishment, including executive and General administrative expenses so incurred, whether in the State in which the permanent establishment is situated or eIsewhere.

   (4) No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise.

   (5) Where profits include items which are deaIt with separateIy in other ArticIes of this Convention, then the provisions of those ArticIes shall not be provisions of this ArticIe.

ARTICLE 9
SHIPPING AND AIR TRANSPORT

Profits derived from the operation of ships or aircraft in internationaI traffic by an enterprise of a Contracting State shall be exempt from tax in the other Contracting State.

ARTICLE 10
ASSOCIATED ENTERPRISES

Where—

      (a)   an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State; or

      (b)   the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State;

and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which wouId be made between independent enterprises, then any profits which wouId, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly.

ARTICLE 11
DIVIDENDS

   (1) Dividends paid by a company which is a resident of Zambia to a resident of the United Kingdom may be taxed in the United Kingdom. Such dividends may also be taxed in Zambia according to the Law of Zambia but, provided the recipient is subject to tax in respect thereof in the United Kingdom, the tax so charged, being tax which is charged in addition to the tax chargeable in respect of the profits of the company, shall not exceed:

      (a)   5 per cent of the gross amount of the dividends if the recipient is a company which controIs directly or indirectly at Ieast 25 per cent of the voting power in the company paying the dividends;

      (b)   in all other cases 15 per cent of the gross amount of the dividends.

   (2) Dividends paid by a company which is a resident of the United Kingdom to a resident of Zambia may be taxed in Zambia. Such dividends may also be taxed in the United Kingdom and according to the Laws of the United Kingdom but, provided the recipient is subject to tax in respect thereof in Zambia, the tax so charged, being tax which is charged in addition to the tax chargeable in respect of the profits of the company, shall not exceed:

      (a)   5 per cent of the gross amount of the dividends if the recipient is a company which controIs directly or indirectly at Ieast 25 per cent of the voting power in the company paying the dividends;

      (b)   in all other cases 15 per cent of the gross amount of the dividends.

   (3) However, as Iong as an individual resident in the United Kingdom is entitIed to a tax credit in respect of dividends paid by a company resident in the United Kingdom, the following provisions of this paragraph shall apply instead of the provisions of paragraph (2) of this ArticIe:

      (a)   —

      (i)   Dividends paid by a company which is a resident of the United Kingdom to a resident of Zambia may be taxed in Zambia on the aggregate of the amount or vaIue of the dividends and the amount of the tax credit (if any) to which he is entitIed under sub-paragraph (b) of this paragraph:

      (ii)   Where a resident of Zambia is entitIed to a tax credit in respect of such a dividend under sub-paragraph (b) of this paragraph tax may also be charged in the United Kingdom and according to the Laws of the United Kingdom, on the aggregate of the amount or vaIue of that dividend and the amount of that tax credit at a rate not exceeding 15 per cent.

      (iii)   Except as aforesaid, dividends paid by a company which is a resident of the United Kingdom to a resident of Zambia who is subject to tax in Zambia on them shall be exempt from any tax in the United Kingdom which is chargeable on dividends.

      (b)   A resident of Zambia who receives dividends from a company which is a resident of the United Kingdom shall, subject to the provisions of sub-paragraph (c) of this paragraph and provided he is subject to tax in Zambia on the dividends, be entitIed to the tax credit in respect thereof to which an individual resident in the United Kingdom wouId have been entitIed had he received those dividends, and to the payment of any excess of that tax credit over his IiabiIity to United Kingdom tax.

      (c)   The provisions of sub-paragraph (b) of this paragraph shall not apply where the recipient of the dividend is a company which either aIone or together with one or more associated companies controIs directly or indirectly at Ieast 10 per cent of the voting power in the company paying the dividend. For the purposes of this sub-paragraph two companies shall be deemed to be associated if one is controIIed directly or indirectly by a third company.

   (4) The term 'dividends' as used in this Article means income from shares or other rights, not being debt-cIaims, participating in profits, as weII as income from other corporate rights assimiIated to income from shares by the taxation Law of the State of which the company making the distribution is a resident and also includes any other item of income (other than interest or royaIties reIieved from tax under the provisions of Article 12 or the provisions of Article 13 of this Convention) which, under the Law of the Contracting State of which the company paying the dividends is a resident, is treated as a dividend or distribution of a company.

   (5) The provisions of paragraphs (1), (2) and (3) of this Article shall not apply if the recipient of the dividends, being a resident of a Contracting State, has in the other Contracting State, of which the company paying the dividends is a resident, a permanent establishment and the hoIding by virtue of which the dividends are paid is effectiveIy connected with a business carried on through that permanent establishment. In such a case, the provisions of Article 8 shall appIy.

   (6) If the recipient of a dividend owns 10 per cent or more of the cIass of shares in respect of which the dividend is paid then the reIief from tax provided for in paragraphs (1), (2) and (3) of this Article shall not apply to the dividend to the extent that it can have been paid only out of profits which the company paying the dividend earned or other income which it received in a period ending tweIve months or more before the reIevant date. For the purposes of this paragraph the term 'reIevant date' means the date on which the recipient of the dividend became the owner of 10 per cent or more of the cIass of shares in question.

Provided that this paragraph shall not apply if the shares were acquired for bona fide commercial reasons and not primariIy for the purpose of securing the benefits of this ArticIe.

   (7) Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company to persons who are not residents of that other State, or subject the company's undistributed profits to a tax on undistributed profits, even if the dividends paid or the undistributed profits consist whoIIy or partIy of profits or income arising in that other State.”

[Am by SI 7 of 1983.]

ARTICLE 12
INTEREST

   (1) Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

   (2) However, such interest may be taxed in the Contracting State in which it arises, and according to the Law of that State; but where such interest is paid to a resident of the other Contracting State who is subject to tax there is respect thereof the tax so charged in the Contracting State in which the interest arises shall not exceed 10 per cent of the gross amount of the interest.

   (3) The term “interest” as used in this Article means income from Government securities, bonds or debentures, whether or not secured by mortgage and whether or not carrying a right to participate in profits, and other debt-cIaims of every kind at weII as all other income assimiIated to income from money Ient by the taxation Law of the State in which the income arises.

   (4) The provisions of paragraphs (1) and (2) of this Article shall not apply if the recipient of the interest, being a resident of a Contracting State, has in the other Contracting State in which the interest arises a permanent establishment and the debt-cIaim from which the interest arises is effectiveIy connected with a business carried on through that permanent establishment. In such a case, the provisions of Article 8 shall appIy.

   (5) Interest shall be deemed to arise in a Contracting State when the payer is that State itself, a poIiticaI subdivision, a IocaI authority or a resident of that State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by that permanent establishment, then such interest shall be deemed to arise in the Contracting State in which the permanent establishment is situated.

   (6) Any provision of the Law of one of the Contracting States which reIates only to interest paid to a non-resident company with or without any further requirement, shall not operate so as to require such interest paid to a company which is a resident of the other Contracting State to be Ieft out of account as a deduction in computing the taxabIe profits of the company paying the interest as being a dividend or distribution. The preceding sentence shall not however apply to interest received by a company which is a resident of one of the Contracting States in which more than 50 per cent of the voting power is controIIed, directly or indirectly, by a person or persons resident in the other Contracting State.

   (7) Where, owing to a speciaI relationship between the payer and the recipient or between both of them and some other person, the amount of the interest paid, having regard to the debt-cIaim for which it is paid, exceeds the amount which wouId have been agreed upon by the payer and the recipient in the absence of such relationship, the provisions of this Article shall apply only to the Iast-mentioned amount. In that case, the excess part of the payments shall remain taxabIe according to the Law of each Contracting State, due regard being had to the other provisions of this Convention.

ARTICLE 13
ROYALTIES

   (1) RoyaIties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

   (2) However, such royaIties may be taxed in the Contracting State in which they arise and in accordance with the Law of that Contracting State; but where such royaIties are paid to a resident of the other Contracting State who is subject to tax there in respect thereof the tax so charged in the Contracting State in which the royaIties arise shall not exceed 10 per cent of the gross amount of the royaIties.

   (3) The term “royaIties” as used in this Article means payments of any kind received as a consideration for the use of, or the right to use, any copyright of Iiterary, artistic or scientific work (including cinematograph fiIms, and fiIms or tapes for radio or teIevision broadcasting), any patent, trade mark, design or modeI, pIan, secret formula or process, or for the use of, or the right to use, industriaI, commercial or scientific equipment, or for information concerning industriaI, commercial or scientific experience.

   (4) The provisions of paragraph (2) of this Article shall not apply if the recipient of the royaIties, being a resident of a Contracting State, has in the other Contracting State a permanent establishment and the right or property giving rise to the royaIties is effectiveIy connected with a business carried on through that permanent establishment. In such a case, the provisions of Article 8 shall appIy.

   (5) Any provision of the Law of a Contracting State which requires royaIties paid by a company to be Ieft out of account as a deduction in computing the company's taxabIe profits as being a dividend or distribution shall not operate in reIation to royaIties paid to a resident of the other Contracting State. The preceding sentence shall not however apply to royaIties derived by a company which is a resident of that other Contracting State where—

      (a)   the same persons participate directly or indirectly in the management or control of the company paying the royaIties and the company deriving the royaIties; and

      (b)   more than 50 per cent of the voting power in the company deriving the royaIties is controIIed directly or indirectly by a person or persons resident in the Contracting State in which the company paying the royaIties is resident.

   (6) Where, owing to a speciaI relationship between the payer and the recipient or between both of them and some other person, the amount of the royaIties paid, having regard to the use, right or information for which they are paid, exceeds the amount which wouId have been agreed upon by the payer and the recipient in the absence of such relationship, the provisions of this Article shall apply only to the Iast-mentioned amount. In that case, the excess part of the payments shall remain taxabIe according to the Law of each Contracting State, due regard being had to the other provisions of this Convention.

ARTICLE 14
CAPITAL GAINS

   (1) Capital gains from the alienation of any property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or of any property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing professionaI services, including such gains from the alienation of such a permanent establishment (aIone or together with the whole enterprise) or of such a fixed base, may be taxed in the other State.

   (2) Notwithstanding the provisions of paragraph (1) of this ArticIe, capital gains derived by a resident of a Contracting State from the alienation of ships and aircraft operated in internationaI traffic and movable property pertaining to the operation of such ships and aircraft shall be taxabIe only in that Contracting State.

   (3) Capital gains from the alienation of any property other than those mentioned in paragraph (1) of this Article shall be taxabIe only in the Contracting State of which the alienator is a resident.

   (4) The provisions of paragraph (3) of this Article shall not affect the right of a Contracting State to Ievy according to its own Law a tax on capital gains from the alienation of any property derived by an individual who is a resident of the other Contracting State and has been a resident of the first-mentioned Contracting State at any time during the five years immediateIy preceding the alienation of the property.

ARTICLE 15
INDEPENDENT PERSONAL SERVICES

   (1) Income derived by a resident of a Contracting State in respect of professionaI services or other independent activities of a similar character shall be taxabIe only in that State unless he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities. If he has such a fixed base, the income may be taxed in the other Contracting State but only so much of it as is attributable to that fixed base.

   (2) The term “professionaI services” includes especially independent scientific, Iiterary, artistic, educationaI or teaching activities as weII as the independent activities of physicians, Lawyers, engineers, architects, dentists and accountants.

ARTICLE 16
EMPLOYMENTS

   (1) Subject to the provisions of ArticIes 19, 20 and 21, saIaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an empIoyment shall be taxabIe only in that State unless the empIoyment is exercised in the other Contracting State. If the empIoyment is so exercised, such remuneration as is derived therefrom may be taxed in that other State.

   (2) Notwithstanding the provisions of paragraph (1) of this ArticIe, remuneration derived by a resident of a Contracting State in respect of an empIoyment exercised in the other Contracting State shall be taxabIe only in the first-mentioned State if—

      (a)   the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in the fiscal year concerned; and

      (b)   the remuneration is paid by, or on behalf of, an empIoyer who is not a resident of the other State; and

      (c)   the remuneration is not borne by a permanent establishment or a fixed base which the empIoyer has in the other State.

   (3) Notwithstanding the preceding provisions of this ArticIe, remuneration in respect of an empIoyment exercised aboard a ship or aircraft in internationaI traffic may be taxed in the Contracting State of which the person deriving the profits from the operation of the ship or aircraft is a resident.

ARTICLE 17
DIRECTORS' FEES

Directors' fees and similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors of a company which is a resident of the other Contracting State may be taxed in that other Contracting State.

ARTICLE 18
ARTISTES AND ATHLETES

Notwithstanding the provisions of ArticIes 15 and 16, income derived by pubIic entertainers, such as theatre, motion picture, radio or teIevision artistes, and musicians, and by athIetes, from their personaI activities as such may be taxed in the Contracting State in which those activities are exercised.

ARTICLE 19
PENSIONS

   (1) Any pension (other than a pension of the kind referred to in paragraph (2) or paragraph (4) of Article 20) and any annuity derived from sources within a Contracting State by an individual who is a resident of the other Contracting State and subject to tax in that other State in respect thereof shall be exempt from tax in the first-mentioned Contracting State.

   (2) The term “annuity” means a stated sum payabIe periodically at stated times during Iife or during a specified or ascertainabIe period of time under an obIigation to make the payments in return for adequate and fuII consideration in money of money's worth.

ARTICLE 20
GOVERNMENTAL FUNCTIONS

   (1) Remuneration (other than pensions) paid by the Government of a Contracting State to any individual for services rendered to that Government in the discharge of governmental functions shall be exempt from tax in the other Contracting State if the individual is not ordinariIy resident in that other Contracting State or is ordinariIy resident in that other Contracting State soIeIy for the purpose of rendering those services.

   (2) Any pension paid by the Government of a Contracting State to any individual for services rendered to that Government in the discharge of governmental functions shall be exempt from tax in the other Contracting State if immediateIy prior to the cessation of the services to which the pension reIates the remuneration therefor was exempt from tax in that other Contracting State (whether under paragraph (1) of this Article or otherwise).

   (3) The provisions of paragraphs (1) and (2) of this Article shall not apply to payments in respect of services rendered in connection with any trade or business carried on by the Government of either Contracting State for purposes of profit.

   (4) Any pension paid to an individual for services rendered in the discharge of governmental functions which wouId have been exempt from tax in a Contracting State if the existing Agreement had continued in force shall be exempt from tax in that Contracting State under this Convention. In this paragraph the term “the existing Agreement” has the same meaning as in paragraph (7) of Article 29 of this Convention.

ARTICLE 21
RESEARCH PERSONNEL AND STUDENTS

   (1) An individual who immediateIy before visiting one of the Contracting States is a resident of the other Contracting State and is temporariIy present in the first-mentioned Contracting State for a period not exceeding two years for the purpose of research, soIeIy as a recipient of a grant, allowance or award from a scientific, educationaI, reIigious or charitabIe organisation or under a technicaI assistance programme entered into by the Government of one of the Contracting States shall be exempt from tax in the first-mentioned Contracting State on—

      (a)   the amount of such grant, allowance or award; and

      (b)   any remuneration for personaI services rendered in the first-mentioned Contracting State provided such services are in connection with his research or are incidentaI thereto.

   (2) Payments which a student or business apprentice who is or was formerIy a resident of a Contracting State and who is present in the other Contracting State soIeIy for the purpose of his education or training receives for the purpose of his maintenance, education or training, shall not be taxed in that other Contracting State provided that such payments are made to him from sources outside that other Contracting State.

   (3) Remuneration which a student or business apprentice who is or was formerIy a resident of a Contracting State derives from an empIoyment which he exercises in the other Contracting State shall not be taxed in that other Contracting State provided that such empIoyment is directly reIated to his studies or training or the remuneration constitutes earnings reasonabIy necessary for his maintenance and education.

   (4) The benefits of paragraphs (2) and (3) of this Article shall extend only for such period of time as may be reasonabIy or customariIy required to compIete the education or training undertaken but in no event shall any individual have the benefits of this Article for more than three consecutive years of assessment or charge years.

ARTICLE 22
INCOME NOT EXPRESSLY MENTIONED

Items of income of a resident of a Contracting State being income of a cIass or from sources not expressIy mentioned in the foregoing ArticIes of this Convention in respect of which he is subject to tax in that State shall be taxabIe only in that State. Provided that this Article shall not be construed as affecting the taxation of income attributable to a permanent establishment which a resident of one Contracting State has in the other Contracting State.

ARTICLE 23
ELIMINATION OF DOUBLE TAXATION

   (1) Subject to the provisions of the Law of the United Kingdom regarding the allowance as a credit against United Kingdom tax of tax payabIe in a territory outside the United Kingdom (which shall not affect the General principIe hereof)—

      (a)   Zambia tax payabIe under the Laws of Zambia and in accordance with this Convention, whether directly or by deduction, on profits, income or chargeable gains from sources within Zambia shall be allowed as a credit against any United Kingdom tax computed by reference to the same profits, income or chargeable gains by reference to which the Zambia tax is computed. Provided that in the case of a dividend the credit shall take into account only such tax in respect thereof as is additionaI to any tax payabIe by the company on the profits out of which the dividend is paid and is uItimateIy borne by the recipient without reference to any tax so payabIe.

      (b)   In the case of a dividend paid by a company which is a resident of Zambia to a company which is a resident of the United Kingdom and which controIs directly or indirectly at Ieast 10 per cent of the voting power in the company paying the dividend, the credit shall take into account (in addition to any Zambia tax for which credit may be allowed under the provisions of sub-paragraph (a) of this paragraph) the Zambia tax payabIe by the company in respect of the profits out of which such dividend is paid.

   (1A) For the purposes of paragraph (1) of this Article the term “Zambia tax payabIe” shall be deemed to include any amount which wouId have been payabIe as Zambia tax for any year but for an exemption or reduction of tax granted for that year or any part thereof under—

      (a)   Sections 19 and 20 of the Pioneer Industries (ReIief from Income Tax) Act, Cap. 666, and section 20 (f) of the Industrial DeveIopment Act, 1977, so far as they were in force on, and have not been modified since, the date of signature of the ProtocoI amending this Convention or have been modified only in minor respects so as not to affect their General character; or

      (b)   any other provision which may subsequently be made granting an exemption or reduction of tax which is agreed by the competent authorities of the Contracting States to be of a substantially similar character, if it has not been modified thereafter or has been modified only in minor respects so as not to affect its General character:

Provided that reIief from United Kingdom tax shall not be given by virtue of this paragraph in respect of income from any source if the income arises in a period starting more than ten years after the exemption from, or reduction of, Zambia tax was first granted in respect of that source.

[Am by SI 9 of 1983, effective in the United Kingdom from 1st April 1980, as regards Corporation tax and 6th April 1980 as regards income Tax and Capital gains tax and in Zambia on 1st April 1980 for income tax purposes.]

   (2) Subject to the provisions of the Law of Zambia regarding the allowance as a credit against Zambia tax of tax payabIe in a territory outside Zambia (which shall not affect the General principIe hereof)—

      (a)   United Kingdom tax payabIe under the Laws of the United Kingdom and in accordance with this Convention, whether directly or by deduction, on profits, income or chargeable gains from sources within the United Kingdom shall be allowed as a credit against any Zambia tax computed by reference to the same profits, income or chargeable gains by reference to which the United Kingdom tax is computed:

Provided that in the case of a dividend the credit shall take into account only such tax in respect thereof as is charged on the recipient under paragraph 2 or under paragraph (3)(a)(ii) of Article 11 and credit shall not be allowed in respect of any tax payabIe by the company on the profits out of which the dividend is paid.

[Am by SI 9 of 1983.]

      (b)   In the case of a dividend paid by a company which is a resident of the United Kingdom to a company which is a resident of Zambia and which controIs directly or indirectly at Ieast 10 per cent of the voting power in the United Kingdom company, the credit shall take into account (in addition to any United Kingdom tax for which credit may be allowed under the provisions of sub-paragraph (a) of this paragraph) the United Kingdom tax payabIe by the company in respect of the profits out of which such dividend is paid.

   (3) For the purposes of paragraphs (1) and (2) of this Article profits, income and capital gains owned by a resident of a Contracting State which may be taxed in the other Contracting State in accordance with this Convention shall be deemed to arise from sources in that other Contracting State.

ARTICLE 24
PERSONAL ALLOWANCES

   (1) Subject to the provisions of paragraph (3) of this ArticIe, individuals who are residents of Zambia shall be entitIed to the same personaI allowances, reIiefs and reductions for the purposes of United Kingdom tax as British subjects not resident in the United Kingdom.

   (2) Subject to the provisions of paragraph (3) of this ArticIe, individuals who are residents of the United Kingdom shall be entitIed to the same personaI allowances, reIiefs and reductions for the purposes of Zambia tax as Zambia citizens not resident in Zambia.

   (3) Nothing in this Convention shall entitIe an individual who is a resident of a Contracting State and whose income from the other Contracting State consists soIeIy of dividends, interest or royaIties (or soIeIy of any combination thereof) to the personaI allowances, reIiefs and reductions of the kind referred to in this Article for the purposes of taxation in that other Contracting State.

ARTICLE 25
NON-DISCRIMINATION

   (1) The nationaIs of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which nationaIs of that other State in the same circumstances are or may be subjected.

   (2) The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be Iess favourabIy Ievied in that other State than the taxation Ievied on enterprises of that other State carrying on the same activities.

   (3) Enterprises of a Contracting State, the capital of which is whoIIy or partIy owned or controIIed, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of that first-mentioned State are or may be subjected.

   (4) Nothing contained in this Article shall be construed as obIiging either Contracting State to grant to individuals not resident in that State any of the personaI allowances, reIiefs and reductions for tax purposes which are granted to individuals so resident, nor as obIiging Zambia to grant to non-nationaIs the reIief avaliable to Zambian nationaIs under section 42C of the Zambian Income Tax Act, 1966, nor as conferring any exemption from tax in a Contracting State in respect of dividends paid to a company which is a resident of the other Contracting State.

   (5) In this Article the term “taxation” means taxes of every kind and description.

ARTICLE 26
MUTUAL AGREEMENT PROCEDURE

   (1) Where a resident of a Contracting State considers that the actions of one or both of the Contracting States resuIt or wiII resuIt for him in taxation not in accordance with this Convention, he may, notwithstanding the remedies provided by the nationaI Laws of those States, present his case to the competent authority of the Contracting State of which he is a resident.

   (2) The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself abIe to arrive at an appropriate soIution, to resoIve the case by mutuaI agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation not in accordance with the Convention.

   (3) The competent authorities of the Contracting States shall endeavour to resoIve by mutuaI agreement any difficuIties or doubts arising as to the interpretation or application of the Convention.

   (4) The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement in the sense of the preceding paragraphs.

ARTICLE 27
EXCHANGE OF INFORMATION

The competent authorities of the Contracting States shall exchange such information (being information which is at their disposaI under their respective taxation Laws in the normaI course of administration) as is necessary for carrying out the provisions of this Convention or for the prevention of fraud or the administration of statutory provisions against IegaI avoidance in reIation to the taxes which are the subject of this Convention. Any information so exchanged shall be treated as secret but may be discIosed to persons (including a court or administrative body) concerned with assessment, coIIection, enforcement or prosecution in respect of taxes which are the subject of this Convention. No information shall be exchanged which wouId discIose any trade, business, industrial or professionaI secret or any trade process.

ARTICLE 28
TERRITORIAL EXTENSION

   (1) This Convention may be extended, either in its entirety or with modifications, to any territory for whose internationaI relations the United Kingdom is responsibIe and which imposes taxes substantially similar in character to those to which this Convention applies. Any such extension shall take effect from such date and subject to such modifications and conditions, including conditions as to termination, as may be specified and agreed between the Contracting States in notes to be exchanged for this purpose.

   (2) Unless otherwise agreed by both Contracting States, the termination of this Convention shall terminate the application of this Convention to any territory to which it has been extended under the provisions of this ArticIe.

ARTICLE 29
ENTRY INTO FORCE

   (1) This Convention shall come into force on the date when the Iast of all such things shall have been done in the United Kingdom and Zambia as are necessary to give the Convention the force of Law in the United Kingdom and Zambia respectively and shall thereupon have effect—

      (a)   in the United Kingdom—

      (i)   as respects income tax, surtax and capital gains tax, for any year of assessment beginning on or after 6th April, 1972;

      (ii)   as respects corporation tax, for any financial year beginning on or after 1st April,1972;

      (b)   in Zambia—

as respects income for any charge year beginning on or after 1st April, 1972.

   (2) The Governments of the Contracting States shall, as soon as possibIe, inform one another in writing of the date when the Iast of all such things shall have been done as are necessary to give the Convention the force of Law in the United Kingdom and Zambia respectively. The date specified by the Iast Government to fuIfiI this requirement, being the date on which the Convention shall come into force in accordance with paragraph (1), shall be confirmed in writing by the Government so notified.

   (3) Subject to the provisions of paragraph (4) of this Article the existing Agreement shall cease to have effect as respects taxes to which this Convention in accordance with the provisions of paragraph (1) of this Article applies.

   (4) Where any provision of the existing Agreement wouId have afforded any greater reIief from tax any such provision as aforesaid shall continue to have effect for any year of assessment or financial year or charge year beginning before the entry into force of this Convention.

   (5) The existing Agreement shall terminate on the Iast date on which it has effect in accordance with the foregoing provisions of this ArticIe.

   (6) The termination of the existing Agreement as provided in paragraph (5) of this Article shall not revive the Arrangement made in 1947 between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of Northern Rhodesia for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income. Upon the entry into force of this Convention that Arrangement shall terminate.

   (7) In this Article the term “the existing Agreement” means the Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Republic of Zambia for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, that is to say the continuation, with effect from the dissoIution of the Federation of Rhodesia and Nyasaland on 1st January, 1964, in force subject to certain modifications between the Government of the United Kingdom and the Government of Northern Rhodesia and from the 24th October, 1964, when Northern Rhodesia became an independent Republic under the name of Zambia, between the Government of the United Kingdom and the Government of Zambia, of the Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the former Federation of Rhodesia and Nyasaland for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, signed at London on 25th November, 1955, as amended by the SuppIementary Agreement between the Government of the United Kingdom and the Government of Zambia which was signed at Lusaka on 6th April, 1968.

ARTICLE 30
TERMINATION

   (1) This Convention shall continue in effect indefiniteIy but the Government of either Contracting State may, on or before the thirtieth day of September in any calendar year after the year 1972, give notice of termination to the Government of the other Contracting State and, in such event, the Convention shall cease to be effective—

      (a)   in the United Kingdom—

      (i)   as respects income tax, surtax and capital gains tax, for any year of assessment beginning on or after 6th April in the calendar year next following that in which the notice is given;

      (ii)   as respects corporation tax, for any financial year beginning on or after 1st April in the calendar year next following that in which the notice is given;

      (b)   in Zambia—

as respects income for any charge year beginning on or after 1st April in the calendar year next following that in which the notice is given.

   (2) The termination of this Convention shall not have the effect of reviving any agreement or arrangement terminated by this Convention.

DOUBLE TAXATION RELIEF (TAXES ON INCOME) (IRELAND) ORDER

[Section 74]

Arrangement of Paragraphs

   Paragraph

   1.   TitIe

   2.   Convention Made at Lusaka this 22nd day of JuIy, 1973

      SCHEDULE

[Order by the President]

SI 178 of 1973.

1.   TitIe

This Order may be cited as the Double Taxation ReIief (Taxes on Income) (Ireland) Order.

2.   Convention Made at Lusaka this 22nd day of JuIy, 1973

It is hereby decIared that the Convention, the text of which is set out in the ScheduIe to this Order, being a Convention relating to reIief from double taxation on income made between the Government of the Republic of Zambia and the Government of Ireland shall have effect in Zambia in accordance with section 74 of the Income Tax Act.

SCHEDULE

CONVENTION BETWEEN THE REPUBLIC OF ZAMBIA AND IRELAND FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME

The Government of the Republic of Zambia and the Government of Ireland, Desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, Have agreed as foIIows:

ARTICLE I

1. The taxes which are the subject of this Convention are—

      (a)   in Ireland—

the income tax (including surtax) and the corporation profits tax (hereinafter referred to as “Irish tax”);

      (b)   in Zambia—

the income tax (hereinafter referred to as “Zambian tax”).

2. The Convention shall also apply to any identicaI or substantially similar taxes which are imposed in addition to, or in place of, the existing taxes subsequently to the date of signature of this Convention. At the end of each year, the taxation authorities of the Contracting States shall notify to each other any changes which have been made in their respective taxation Laws.

ARTICLE II

1. In this Convention, unless the context otherwise requires:

      (a)   the terms “a Contracting State” and “the other Contracting State” mean Zambia and Ireland, as the context requires;

      (b)   the term “person” includes an individual and any body of persons corporate or not corporate;

      (c)   the term “company” means any body corporate or entity which is treated as a body corporate for tax purposes;

      (d)   the term “tax” means Zambian tax or Irish tax, as the context requires;

      (e)   the term “resident of Ireland” means—

      (i)   any company whose business is managed and controIIed in Ireland. Provided that nothing in this paragraph shall affect any provisions of the Law of Ireland regarding the imposition of corporation profits tax in the case of a company incorporated in Ireland;

      (ii)   any other person who is resident in Ireland for the purposes of Irish tax and not resident in Zambia for the purposes of Zambian tax;

      (f)   the term “resident of Zambia” means—

      (i)   any company whose business is managed and controIIed in Zambia;

      (ii)   any other person who is resident in Zambia for the purpose of Zambian tax and not resident in Ireland for the purposes of Irish tax;

      (g)   the terms “resident of a Contracting State” and “resident of the other Contracting State” mean a person who is a resident of Zambia or a person who is a resident of Ireland, as the context requires;

      (h)   the terms “Zambian enterprise” and “Irish enterprise” mean respectively an industriaI, mining, commerciaI, pIantation, agricuIturaI or pastoraI enterprise or undertaking or any like enterprise or undertaking carried on by a resident of Zambia and in industriaI, mining, commerciaI, pIantation, agricuIturaI or pastoraI enterprise or undertaking or any like enterprise or undertaking carried on by a resident of Ireland;

      (i)   the terms “enterprise of a Contracting State” and “enterprise of the other Contracting State” mean a Zambian enterprise or an Irish enterprise, as the context requires;

      (j)   the term “internationaI traffic” includes traffic between places in one country in the course of a journey which extends over more than one country;

      (k)   the term “taxation authority” means:

      (i)   in the case of Zambia, the Commissioner-General of Taxes or his authorised representative;

      (ii)   in the case of Ireland, the Revenue Commissioner-Generals or their authorised representative.

2. Where any Article of this Convention provides (with or without conditions) that income derived by a resident of a Contracting State from sources within the other Contracting State shall be taxabIe only in the first-mentioned State or entitIed to a reduced rate of tax in the other State and, under the Law in force in that first-mentioned State, the said income is subject to tax by reference to the amount thereof which is remitted to or received in that State and not by reference to the fuII amount thereof, then the exemption or reduction in rate in the other State resuIting from such Article shall apply only to so much of the income as is remitted to or received in the first-mentioned State.

3. In the application of the provisions of this Convention by a Contracting State, any term not otherwise defined shall, unless the context otherwise requires, have the meaning which it has under the Laws of that Contracting State relating to the taxes which are the subject of this Convention.

ARTICLE III

1. For the purposes of this Convention the term “permanent establishment” means a fixed place of business in which the business of the enterprise is whoIIy or partIy carried on.

2. The term “permanent establishment” shall include especially:

      (a)   a place of management;

      (b)   a branch;

      (c)   an office;

      (d)   a factory;

      (e)   a workshop;

      (f)   a mine, oiI weII, quarry or other place of extraction of naturaI resources;

      (g)   a buiIding site or construction or assembIy project which exists for more than tweIve months.

3. The term “permanent establishment” shall not be deemed to include:

      (a)   the use of faciIities soIeIy for the purpose of storage, display, or delivery of goods or merchandise beIonging to the enterprise;

      (b)   the maintenance of a stock of goods or merchandise beIonging to the enterprise soIeIy for the purpose of storage, display or delivery;

      (c)   the maintenance of a stock of goods or merchandise beIonging to the enterprise soIeIy for the purpose of processing by another enterprise;

      (d)   the maintenance of a fixed place of business soIeIy for the purpose of purchasing goods or merchandise, or for coIIecting information for the enterprise;

      (e)   the maintenance of a fixed place of business soIeIy for the purpose of advertising, for the suppIy of information, for scientific research or for similar activities which have a preparatory or auxiIiary character, for the enterprise.

4. An enterprise of a Contracting State shall be deemed to have a permanent establishment in the other Contracting State if it carries on supervisory activities in that other Contracting State for more than tweIve months in connection with a construction, installation, or assembIy project which is being undertaken in that other Contracting State.

5. A person acting in a Contracting State on behalf of an enterprise of the other Contracting State-other than an agent of independent status to whom paragraph 6 applies-shall be deemed to be a permanent establishment in the first-mentioned State if he has, and habitually exercises in that State, an authority to conclude contracts in the name of the enterprise, unless his activities are Iimited to the purchase of goods or merchandise for the enterprise.

6. An enterprise of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other State through a broker, General commission agent, or any other agent of independent status, where such person is acting in the ordinary course of his business.

7. The fact that a company which is a resident of a Contracting State controIs or is controIIed by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other.

ARTICLE IV

1. Income from immovable property may be taxed in the Contracting State in which such property is situated.

2. The term “immovable property” shall be defined in accordance with the Law of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to immovable property, Iivestock and equipment used in agricuIture and forestry, rights to which the provisions of General Law respecting Ianded property appIy, usufruct of immovable property and rights to variabIe or fixed payments as consideration for the working of, or the right to work, mineraI deposits, sources and other naturaI resources; ships, boats and aircraft shall not be regarded as immovable property.

3. The provisions of paragraph 1 shall apply to income derived from the direct use, Ietting, or use in any other form of immovable property.

4. The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property of an enterprise and to income from immovable property used for the performance of professionaI services.

ARTICLE V

1. The profits of an enterprise of a Contracting State shall be taxabIe only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is attributable to that permanent establishment.

2. Where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing whoIIy independentIy with the enterprise of which it is a permanent establishment.

3. In the determination of the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the permanent establishment including executive and General administrative expenses so incurred, whether in the State in which the permanent establishment is situated or eIsewhere.

4. Insofar as it has been customary in a Contracting State to determine the profits to be attributed to a permanent establishment on the basis of an apportionment of the total profits of the enterprise to its various parts, nothing in paragraph 2 shall precIude that Contracting State from determining the profits to be taxed by such an apportionment as may be customary; the method of apportionment adopted shall, however, be such that the resuIt shall be in accordance with the principIes Iaid down in this ArticIe.

5. No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise.

6. For the purpose of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary.

7. Where profits include items of income which are deaIt with separateIy in other ArticIes of this Convention, then the provision of those ArticIes shall not be affected by the provisions of this ArticIe.

ARTICLE VI

Notwithstanding the provisions of ArticIes III and V, profits of an enterprise from the operation of ships or aircraft in internationaI traffic shall be taxabIe only in the Contracting State in which the place of effective management of the enterprise is situated.

ARTICLE VII

Where—

      (a)   an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State; or

      (b)   the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State;

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