Property Transfer Tax is tax that is charged on the transfer of property. For purposes of this tax:
- Property means Land, including improvements on it and Shares issued by a company incorporated in the Republic and Mining rights or interest granted under the Mines and Minerals Development Act. They include:
- prospecting licence;
- a large-scale mining licence;
- a large-scale gemstone licence;
- a prospecting permit;
- a small-scale mining licence;
- a small-scale gemstone licence; and
- an artisan’s mining right.
- Transfer does not include:
- Letting or subletting, leasing or sub leasing for a period that is less than 5 years; and
- Allocation of shares by the company to the member in whose name it is first registered, but includes transfers of property within a group of companies whose holding company is incorporated in Zambia.
The taxable value of property is the open market value, in the case of land, the net realizable value or nominal price, whichever is greater in the case of shares and the actual price of a mining right or interest, in the case of a mining right or interest.
PTT is paid by the seller, and the due date for its payment is the 14th day of the month following the month in which the transaction took place.
Where a person transfers his property to a member of his immediate family, the realized value of such property is the actual price, if any received by the transferor. The term “Immediate Family” with respect to the person transferring the property, refer to “a spouse, a child, a duly adopted child or step – child”.
Where, within a group of companies, a company transfers property to another company (other than a company which is not resident in Zambia) within the group for the purposes of internal organization of the group, the Commissioner General may treat such transfer as being not taxable.
The following organizations are exempt from paying PTT.
- The Government of the Republic of Zambia
- Any foreign government
- Any international organization, foundation or trust as the Minister of Finance may approve for the purpose;
- Any co-operative society registered under the Co-operative Societies Act that is exempt under the Income Tax Act.
- A local authority;
- Registered trade unions;
- Any club, society or association that is registered a Public Benefit Organization or as the minister may approve
- Approved Pension Funds and Medical Aid Society;
- Employees’ Savings Scheme or Fund;
- Any political party registered as a statutory society under the Societies Act
- Shares or stocks, that are listed on a stock exchange and are duly registered under the Securities Act, e.g. the Lusaka Stock Exchange, are exempt from Property Transfer Tax. Listed shares are those that are readily transferable or disposable on that Stock Exchange.
- Contributions towards the equity of company:
The Commissioner General may treat the transfer of property by a shareholder of a company incorporated under the companies Act, as having no realizable value, if such transfer is his contribution towards the equity of that company. However, for exemption applications involving the transfer of shares or other properties in a re-organization, proof of ownership of the number of shares held must be made by attaching the relevant share certificate.