Income tax on rent, worked example, in Zambia
|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|
|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|
|Withholding Tax 5||10%||1,800||7,200||14,400|
|Tax Due as % of Gross Income||18.16%||25.63%||26.88%|
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.