Income tax on rent, worked example, in Zambia

May 10, 2018

Non-resident couple's rental income1 US$1,500 US$6,000 US$12,000
Monthly Rental Income2 1,500 6,000 12,000
Annual Rental Income 18,000 72,000 144,000
Less Expenses 3 25% 4,500 18,000 36,000
= Taxable Income 13,500 54,000 108,000
Income Tax4
Up to ZMW 39,600 0% - - -
ZMW39,600 - ZMW 49,200 25% 240 240 240
ZMW49,200 - ZMW 74,400 30% 756 756 756
Over ZMW 74,400 37.50% 2,273 17,460 37,710
Annual Income Tax Due 3,269 18,456 38,706
Other Tax
Withholding Tax 5 10% 1,800 7,200 14,400
Tax Due as % of Gross Income 18.16% 25.63% 26.88%

Notes


1 The property is jointly owned by husband and wife.

2 Exchange rate used: 1.00 USD = 10.00 ZMW

3 Estimated values. Income-generating expenses are deductible when calculating taxable income.

4 Rental income earned by nonresident individuals is taxed at progressive rates.

5 A withholding tax of 10% applies on rental income earned by nonresidents, to be withheld by the tenant. The withholding tax is set against the final income tax liability.