The Minister of Finance (MoF) is set to approve changes in transfer pricing rules, including procedures for the valuation of the transfer pricing transactions between related entities and allow for taxable income adjustments and documentation requirements. The key changes are:

  • Transfer pricing regulations has been placed to approve with the new requirements and amendments of existing rules which are expected to be entered into force from January 2018;
  • If the amended transfer pricing regulations are approved, taxpayers whose annual net turnover and other income is lower than ZMW20 million in the previous year of assessment will be exempted from transfer pricing rule;
  • The amended regulations oblige taxpayers to maintain information and documents relating to the transfer pricing guidelines adopted by the taxpayer. The documentation is required to demonstrate market parity with regard to the conditions and selection of the appropriate methodology according to the OECD guidelines, which reflect an arm’s length comparison which ensures the highest level of comparability;
  • The amended transfer pricing regulations have adopted the methods as stated in the OECD guidelines for Multinational Entities and Tax Administrations;
  • The documentation must be submitted within 14 days from the date of request by the tax authority.