Reverse VAT

Reverse VAT is the VAT that is imposed on local businesses that receive services from foreign suppliers that are not registered for VAT in Zambia. The tax is imposed to level the playing field between local and foreign suppliers of similar services. Without Reverse VAT, local suppliers  would have to be required to charge VAT while foreign suppliers would not. This would disadvantage local suppliers.

There are two ways that reverse VAT is administered in Zambia. The first one is where the persons receiving the services have to declare the value of services that they receive from foreign suppliers on the VAT return and the VAT due on them. The VAT due on services received from foreign suppliers is added to their liability. The second method is where the foreign suppliers appoint local agents who issue tax invoices on their behalf, declare the transactions to ZRA and fascilitate the payment of the VAT due.

The accounting period for the Reverse VAT is a calendar month and the due date for filing returns and making payments is the 14th day of the month following the accounting period.