We act as Tax Agents for non-resident suppliers of services to VAT registered Zambian establishments.
Under Zambian VAT rules, Reverse VAT is levied on services provided by non-resident suppliers. Reverse VAT is the transfer of liability to account for and pay VAT from the supplier of services to the recipient of the service. Given that there is no payment to the recipient of the service by the supplier, Reverse VAT is a cost to the recipient of services.
Why the Need for a Tax Agent
The cost of Reverse VAT to the local recipient of foreign services is avoided if the supplier appoints a local tax agent who will act on their behalf in invoicing and accounting for VAT to the Zambia Revenue Authority. The VAT charged to the recipient of foreign services by the Tax Agent is eligible as input tax on the VAT return of the recipient of the foreign service.
Why the need for Reverse VAT if the appointment of a Tax Agent Creates a Zero Effect?
Reverse VAT achieves two main objectives:
- It improves tax compliance;
- The data submitted to Zambia Revenue Authority is used to track trade with other jurisdictions.
Examples of imported services that attract reverse VAT
- Leasing/Rental of equipment
- Management and consultancy services
- Technical advisory services
- Marketing information and sales promotion
- Inland transportation services
- Building, construction and contracting