Income Tax (Double Taxation Relief) (Taxes on Income) (The Swiss Confederation) Order, 2020

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Jurisdiction: Zambia
Instrument: Statutory instrument
Citation: SI 82 of 2020
Version: 9 Oct 2020
Language: en
Official source: View official record ↗

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About this statute

This section gives the Order’s short title. The Convention takes effect in Zambia according to section 74 of the Act. This Convention applies to persons who are residents of one or both Contracting States. Income from a fiscally transparent entity or arrangement is treated as a resident’s income only to the extent it is taxed that way by the relevant Contracting State, and the paragraph does not limit a Contracting State’s right to tax its residents. This Convention applies to taxes on income imposed for a Contracting State, including its political subdivisions and local authorities.

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Provisions of Income Tax (Double Taxation Relief) (Taxes on Income) (The Swiss Confederation) Order, 2020

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1
This Order may be cited as the Income Tax (Double Taxation
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AI-assisted research summary: This section gives the Order’s short title.

1. This Order may be cited as the Income Tax (Double Taxation Relief) (Taxes on Income) (The Swiss Confederation) Order, 2020. Title
2
The Convention, the text of which is set out in the Schedule,
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AI-assisted research summary: The Convention takes effect in Zambia according to section 74 of the Act.

2. The Convention, the text of which is set out in the Schedule, being an Agreement relating to the relief from double taxation on the income made between the Government of the Republic of Zambia and the Swiss Confederation has effect in Zambia in accordance with section 74 of the Act. Double Taxation Agreement Cap. 323 Copies of this Statutory Instrument can be obtained from the Government Printer, P.O. Box 30136, 10101, Lusaka, Price K 40.00 each 506 Statutory Instruments 9th October, 2020 SCHEDULE (Paragraph 2) CONVENTION BETWEEN THE REPUBLIC OF ZAMBIA AND THE SWISS CONFEDERATION FOR THE AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME AND THE PREVENTION OF TAX EVASION AND AVOIDANCE The Government of the Republic of Zambia and the Swiss Federal Council desiring to further develop their economic relationship and to enhance their cooperation in tax matters, intending to conclude a Convention for the elimination of double taxation with respect to taxes on income without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance (including through treaty-shopping arrangements aimed at obtaining reliefs provided in this Convention for the indirect benefit fo residents of Third States. HAVE AGREED as follows: Article 1 Persons Covered

Part

SCHEDULE

1
This Convention shall apply to persons who are residents of one or both of the Contracting
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AI-assisted research summary: This Convention applies to persons who are residents of one or both Contracting States.

1. This Convention shall apply to persons who are residents of one or both of the Contracting States.
2
For the purposes of this Convention, income derived by or through an entity or arrangement
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AI-assisted research summary: Income from a fiscally transparent entity or arrangement is treated as a resident’s income only to the extent it is taxed that way by the relevant Contracting State, and the paragraph does not limit a Contracting State’s right to tax its residents.

2. For the purposes of this Convention, income derived by or through an entity or arrangement that is treated as wholly or partly fiscally transparent under the tax law of either Contracting State shall be considered to be income of a resident of a Contracting State but only to the extent that the income is treated, for purposes of taxation by that State, as the income of a resident of that State. In no case shall the provisions of this paragraph be construed so as to restrict in any way a Contracting State’s right to tax the residents of that State. Article 2 Taxes Covered
1
This Convention shall apply to taxes on income imposed on behalf of a Contracting State
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AI-assisted research summary: This Convention applies to taxes on income imposed for a Contracting State, including its political subdivisions and local authorities.

1. This Convention shall apply to taxes on income imposed on behalf of a Contracting State or of its political subdivisions or local authorities, irrespective of the manner in which they are levied.
2
There shall be regarded as taxes on income all taxes imposed on total income, or on
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AI-assisted research summary: This provision says which taxes count as taxes on income.

2. There shall be regarded as taxes on income all taxes imposed on total income, or on elements of income, including taxes on gains from the alienation of movable or immovable property, taxes on the total amounts of wages or salaries paid by enterprises, as well as taxes on capital appreciation.
3
The existing taxes to which this Convention shall apply are in particular
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AI-assisted research summary: This section lists the taxes covered by the Convention in Switzerland and Zambia.

3. The existing taxes to which this Convention shall apply are in particular: (a) (b) in Switzerland: the federal, cantonal and communal taxes on income (total income, earned income, income from capital, industrial and commercial profits, capital gains, and other items of income) (hereinafter referred to as “Swiss tax”); in Zambia: the income tax (hereinafter referred to as “Zambian tax”);
4
This Convention shall apply also to any identical or substantially similar taxes which are
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AI-assisted research summary: The Convention also applies to later taxes that are identical or substantially similar to the existing taxes, and the competent authorities of the Contracting States must notify each other about significant changes in their taxation laws.

4. This Convention shall apply also to any identical or substantially similar taxes which are imposed after the date of signature of this Convention in addition to or in place of, the existing taxes. The competent authorities of the Contracting States shall notify each other of any significant changes which have been made in their respective taxation laws.
5
This Convention shall not apply to taxes withheld at source on prizes in a lottery
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AI-assisted research summary: The Convention does not apply to taxes withheld at source on lottery prizes.

5. This Convention shall not apply to taxes withheld at source on prizes in a lottery. 9th October, 2020 Statutory Instruments 507 Article 3 General Definition
1
For the purposes of this Convention, unless the context otherwise requires
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AI-assisted research summary: This section defines key terms used in the Convention.

1. For the purposes of this Convention, unless the context otherwise requires: (a) (i) the term “Switzerland” means the territory of the Swiss Confederation as defined by its laws in accordance with international law; (ii) the term “Zambia” means the Republic of Zambia, or any area within which Zambia, in accordance with international law, may exercise sovereign rights or jurisdiction. (b) the term “person” includes an individual, a company and any other body of persons; (c) the term “company” means any body corporate or any entity which is treated as a body corporate for tax purposes; (d) the term “enterprise” applies to the carrying on of any business; (e) the terms “enterprise of a Contracting State” and “enterprise of the other Contracting State” means respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State; (f) the term “international traffic” means any transport by a ship or aircraft operated by an enterprise of a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State; (g) the term “competent authority” means— (i) in the case of Switzerland , the Head of the Federal Department of Finance or his authorised representative; (ii) in the case of Zambia, the Commissioner-General of the Zambia Revenue Authority or the Commissioner-General’s authorised representative; (h) the term “national” in relation to a Contracting State means— (i) any individual possessing the nationality or the citizenship of a Contracting State; (ii) any legal person, partnership or association deriving its status as such from the laws in force in a Contracting State; (i) the term “pension scheme” means any plan, scheme, fund, foundation, trust or other arrangement established in a Contracting State which is: (i) regulated by and generally exempt from income taxation in that State; and (ii) operated principally to administer or provide pension or retirement benefits or to earn income for the benefit of one or more such schemes; (j) the term “business” includes the performance of professional services and of other activities of an independent character.
2
As regards the application of this Convention at any time by a Contracting State, any term
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AI-assisted research summary: Undefined terms in the Convention take the meaning they have under the State’s tax law, unless the context requires otherwise.

2. As regards the application of this Convention at any time by a Contracting State, any term not defined therein shall, unless the context otherwise requires, have the meaning that it has as that time under the law of that State for the purpose of the taxes to which this Convention applies, any meaning under the applicable tax laws of that State prevailing over a meaning given to the term under other laws of that State. Article 4 Resident
1
For the purpose of this Convention, the term “resident of a Contracting State” means any
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AI-assisted research summary: This provision defines “resident of a Contracting State” for the Convention.

1. For the purpose of this Convention, the term “resident of a Contracting State” means any person who, under the laws of that State, is liable to tax therein by reason of that person’s domicile, residence, place of incorporation, place of management or any other criterion of a similar nature, and also includes that State and any political subdivision or local authority thereof. This term, however, does not include any person who is liable to tax in that State in respect only of income from sources in that State. 508 Statutory Instruments 9th October, 2020
2
Where by reason of the provisions of paragraph 1 an individual is a resident of both
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AI-assisted research summary: If an individual is resident in both Contracting States, this section applies tie-breaker rules to treat the person as resident only in one State.

2. Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then that individual ‘s status shall be determined as follows: (a) the individual shall be deemed to be a resident solely of the State in which a permanent home is available to the individual; if a permanent home is available to the individual in both States, the individual shall be deemed to be a resident solely of the State with which the individual’s personal and economic relations are closer (centre of vital interests); (b) if sole residence cannot be determined under the provisions of subparagraph (a), the individual shall be deemed to be a resident solely of the State in which the individual has an habitual abode; (c) if the individual has an habitual abode in both States or in neither of them, the individual shall be deemed to be a resident solely of the State of which the individual is a national; (d) if the individual is a national of both States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.
3
Where by reason of the provisions of paragraph 1 a person other than an individual is a
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AI-assisted research summary: If a company or other non-individual is resident in both Contracting States, it is treated as resident in the State where its place of effective management is located.

3. Where by reason of the provisions of paragraph 1 a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident of the State in which its place of effective management is situated. In cases of doubt, the competent authorities of the Contracting States shall endeavour to determine by mutual agreement the State in which the person’s place of effective management is exercised, and in doing so shall take into account all relevant factors. In the absence of such agreement, that person shall not be entitled to claim any benefits provided by this Convention except those provided by paragraph 1 of Article 22 (Elimination of double taxation), Article 23 (Nondiscrimination) and Article 24 (Mutual agreement procedure). Article 5 Permanent establishment
1
For the purposes of this Convention, the term “permanent establishment” means a fixed
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AI-assisted research summary: This provision defines “permanent establishment” as a fixed place of business through which an enterprise’s business is carried on wholly or partly.

1. For the purposes of this Convention, the term “permanent establishment” means a fixed place of business through which the business of an enterprise is wholly or partly carried on.
2
The term “permanent establishment” includes especially
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AI-assisted research summary: “Permanent establishment” includes listed places such as a place of management, branch, office, factory, workshop, mine, oil or gas well, quarry, or other place used to extract or exploit natural resources.

2. The term “permanent establishment” includes especially: (a) a place of management; (b) a branch; (c) an office; (d) a factory; (e) a workshop; and (f) a mine, an oil or gas well, a quarry or any other place of extraction or exploitation of natural resources.
3
The term “permanent establishment” shall be deemed to include
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AI-assisted research summary: “Permanent establishment” includes certain building, service, individual-service, and natural-resources installation cases when the relevant activity lasts at least 183 days or more.

3. The term “permanent establishment” shall be deemed to include: (a) a building site, a construction, assembly or installation project or any supervisory activity in connection with such site, project or activity, but only where such site, project or activity continues for a period of more than 183 days; (b) the furnishing of services, including consultancy services, by an enterprise through employees or other personnel engaged by an enterprise for such purpose, but only where activities of that nature continue (for the same or a connected project) within the Contracting State for a period or periods exceeding in the aggregate 183 days in any twelvemonth period commencing or ending in the fiscal year concerned; (c) for an individual, the performing of services in a Contracting State by that individual, but only if the individual’s stay in that State, for the purpose of performing those services, is for a period or periods aggregating more than 183 days within any twelve month period commencing or ending in the fiscal year concerned. 9th October, 2020 Statutory Instruments 509 (d) an installation or structure used in the exploration for natural resources provided that the installation or structure continues for a period of not less than 183 days;
4
Notwithstanding the preceding provisions of this Article, the term “permanent
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AI-assisted research summary: This provision says certain limited storage, display, delivery, purchasing, information, advertising, research, installation, and similar auxiliary activities do not count as a “permanent establishment.”

4. Notwithstanding the preceding provisions of this Article, the term “permanent establishment” shall be deemed not to include: (a) the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise; (b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery; (c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise; (d) the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or of collecting information, for the enterprise; (e) the maintenance of a fixed place of business solely for the purpose of advertising, for the supply of information, for scientific research or similar activities which have a preparatory or auxiliary character for the enterprise; (f) an installation or assembly project carried on by an enterprise of a Contracting State in the other Contracting State in connection with the delivery of machinery or equipment produced by that enterprise; (g) the maintenance of a fixed place of business solely for any combination of activities mentioned in subparagraphs (a) to (f), provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary character.
5
Notwithstanding the provisions of paragraphs 1 and 2, where a person
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AI-assisted research summary: An enterprise is treated as having a permanent establishment in a Contracting State if a person acting for it habitually has authority there to conclude contracts in the enterprise’s name, unless the person’s activities are limited to the paragraph 4 activities.

5. Notwithstanding the provisions of paragraphs 1 and 2, where a person other than an agent of an independent status to whom paragraph 6 applies is acting on behalf of an enterprise and has, and habitually exercises, in a Contracting State an authority to conclude contracts in the name of the enterprise, that enterprise shall be deemed to have a permanent establishment in that State in respect of any activities which that person undertakes for the enterprise, unless the activities of such person are limited to those mentioned in paragraph 4 which, if exercised through a fixed place of business, would not make this fixed place of business a permanent establishment under the provisions of that paragraph.
6
An enterprise shall not be deemed to have a permanent establishment in a Contracting
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AI-assisted research summary: An enterprise is not treated as having a permanent establishment in a Contracting State just because it operates through an independent broker or similar agent, if that agent acts in the ordinary course of business.

6. An enterprise shall not be deemed to have a permanent establishment in a Contracting State merely because it carries on business in that State through a broker, general commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business. However, when the activities of such an agent are devoted wholly or almost wholly on behalf of that enterprise, and conditions are made or imposed between that enterprise and the agent in their commercial and financial relations which differ from those which would have been made between independent enterprises, the agent will not be considered an agent of an independent status within the meaning of this paragraph.
7
The fact that a company which is a resident of a Contracting State controls or is controlled
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AI-assisted research summary: A company is not treated as a permanent establishment of another company just because one controls the other or does business in the other state.

7. The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other. Article 6 Income from immovable property
1
Section 1
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AI-assisted research summary: Income from immovable property in the other Contracting State may be taxed there.

1. Income derived by a resident of a Contracting State from immovable property (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other State. 510 Statutory Instruments 9th October, 2020
2
The term “immovable property” shall have the meaning which it has under the law of the
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AI-assisted research summary: This section defines “immovable property” by reference to the law of the Contracting State where the property is located, and it lists items included and excluded from that term.

2. The term “immovable property” shall have the meaning which it has under the law of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources; ships, boats and aircraft shall not be regarded as immovable property.
3
The provisions of paragraph 1 shall apply to income derived from the direct use, letting,
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AI-assisted research summary: Paragraph 1 applies to income from directly using, letting, or otherwise using immovable property.

3. The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or use in any other form of immovable property.
4
The provisions of paragraphs 1 and 3 shall also apply to the income from immovable
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AI-assisted research summary: The rule says paragraphs 1 and 3 also apply to an enterprise’s income from immovable property.

4. The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property of an enterprise. Article 7 Business Profits
1
The profits of an enterprise of a Contracting State shall be taxable only in that State unless
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AI-assisted research summary: An enterprise’s profits are taxable only in its own Contracting State unless it carries on business in the other State through a permanent establishment there.

1. The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is attributable to that permanent establishment.
2
Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries
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AI-assisted research summary: For a business carried on through a permanent establishment in the other Contracting State, profits are attributed as if the permanent establishment were a separate and independent enterprise.

2. Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment.
3
Section 3
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AI-assisted research summary: When calculating the profits of a permanent establishment, deductible expenses include business expenses, including executive and general administrative expenses, even if incurred inside or outside the Contracting State where the permanent establishment is located.

3. In determining the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the business of the permanent establishment, including executive and general administrative expenses so incurred, whether in the Contracting State in which the permanent establishment is situated or elsewhere.
4
Section 4
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AI-assisted research summary: A Contracting State may use a customary apportionment method to determine taxable profits, but the result must align with the Article’s principles, and no profits may be attributed to a permanent establishment merely because it buys goods or merchandise for the enterprise.

4. In so far as it has been customary in a Contracting State to determine the profits to be attributed to a permanent establishment on the basis of an apportionment of the total profits of the enterprise to its various parts, nothing in paragraph 2 shall preclude that Contracting State from determining the profits to be taxed by such an apportionment as may be customary. The method of apportionment adopted shall, however, be such that the result shall be in accordance with the principles contained in this Article. 5. No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise.
6
For the purposes of the preceding paragraphs, the profits to be attributed to the permanent
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AI-assisted research summary: The profits attributed to the permanent establishment must be determined using the same method each year unless there is a good and sufficient reason to change it.

6. For the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary.
7
Where profits include items of income which are dealt with separately in other Articles of
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AI-assisted research summary: If profits include income dealt with separately in other Articles, those Articles are not affected by this Article.

7. Where profits include items of income which are dealt with separately in other Articles of this Agreement, then the provisions of those Articles shall not be affected by the provisions of this Article.
8
A Contracting State shall make no adjustment to the profits that are attributable to a
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AI-assisted research summary: A Contracting State must not adjust profits attributable to a permanent establishment after 5 years from the end of the taxable year, unless the case involves fraud, gross negligence, or wilful default.

8. A Contracting State shall make no adjustment to the profits that are attributable to a permanent establishment of an enterprise of one of the Contracting States after 5 years from the end of the taxable year in which the profits would have been attributable to the permanent establishment. The provisions of this paragraph shall not apply in the case of fraud, gross negligence or wilful default. 9th October, 2020 Statutory Instruments 511 Article 8 International Transport
1
Profits of an enterprise of a Contracting State from the operation of ships or aircraft in
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AI-assisted research summary: Profits from operating ships or aircraft in international traffic are taxable only in that State.

1. Profits of an enterprise of a Contracting State from the operation of ships or aircraft in international traffic shall be taxable only in that State.
2
The provisions of paragraph 1 shall also apply to profits from the participation in a pool,
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AI-assisted research summary: Paragraph 1 also applies to profits from participation in a pool, a joint business, or an international operating agency.

2. The provisions of paragraph 1 shall also apply to profits from the participation in a pool, a joint business or an international operating agency. Article 9 Associated Enterprises
1
Where
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AI-assisted research summary: If related enterprises in two Contracting States make non-arm’s-length conditions, profits that would otherwise have accrued may be included in one enterprise’s profits and taxed accordingly.

1. Where— (a) an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State; or (b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State; and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly.
2
Where a Contracting State includes in the profits of an enterprise of that State and taxes
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AI-assisted research summary: If one State adjusts and taxes enterprise profits in these circumstances, the other State must make an appropriate tax adjustment, and the competent authorities may consult if needed.

2. Where a Contracting State includes in the profits of an enterprise of that State and taxes accordingly profits on which an enterprise of the other Contracting State has been charged to tax in that other State and the profits so included are profits which would have accrued to the enterprise of the firstmentioned State if the conditions made between the two enterprises had been those which would have been made between independent enterprises, then that other State shall make an appropriate adjustment to the amount of the tax charged therein on those profits. In determining such adjustment, due regard shall be had to the other provisions of this Convention and the competent authorities of the Contracting States shall if necessary consult each other.
3
A Contracting State shall not include in the profits of an enterprise, and tax accordingly,
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AI-assisted research summary: A Contracting State must not, after 5 years, include certain unpaid profits in an enterprise’s profits and tax them accordingly, except in cases of fraud, gross negligence, or wilful default.

3. A Contracting State shall not include in the profits of an enterprise, and tax accordingly, profits that would have accrued to the enterprise but by reason of the conditions referred to in paragraph 1 have not so accrued, after 5 years from the end of the taxable year in which the profits would have accrued to the enterprise. The provisions of this paragraph shall not apply in the case of fraud, gross negligence or wilful default. Article 10 Dividends
1
Dividends paid by a company which is a resident of a Contracting State to a resident of the
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AI-assisted research summary: Dividends paid to a resident of the other Contracting State may be taxed in that other State.

1. Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State.
2
However, such dividends may also be taxed in the Contracting State of which the company
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AI-assisted research summary: Dividends may be taxed in the paying company’s Contracting State, but the tax rate is capped at 5% or 15% depending on the beneficiary’s ownership and residence.

2. However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident and according to the laws of that State, but if the beneficial owner of the dividends is a resident of the other Contracting State, the tax so charged shall not exceed: (a) 5 per cent of the gross amount of the dividends if the beneficial owner is a company (other than a partnership) which holds directly at least 10 per cent of the capital of the company paying the dividends throughout a 365 day period that includes the day of the payment of the dividend (for the purpose of computing that period, no account shall be taken of changes of ownership that would directly result from a merger or divisive reorganisation, or from a change of legal form, of the company that holds the shares or that pays the dividend); (b) 15 per cent of the gross amount of the dividends in all other cases. 512 Statutory Instruments 9th October, 2020
3
Notwithstanding the provisions of paragraph 2, the Contracting State of which the company
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AI-assisted research summary: The resident Contracting State must exempt dividends from tax when the dividend’s beneficial owner is one of the listed public bodies or pension schemes for Switzerland or Zambia.

3. Notwithstanding the provisions of paragraph 2, the Contracting State of which the company is a resident shall exempt from tax dividends paid by that company, if the beneficial owner of the dividends is— (a) in the case of Switzerland: (i) the Central Bank of Switzerland; (ii) a pension scheme as listed in clauses (i) to (iv) of subparagraph (b) of paragraph 2 of the protocol to this Convention; and (iii) a statutory body or any entity wholly owned by the Government of Switzerland or its political subdivisions or local authorities; and (b) in the case of Zambia: (i) the Central Bank of Zambia; (ii) a pension scheme as listed in clauses (i) to (iv) of subparagraph (a) of paragraph 2 of the protocol to this Convention; and (iii) a statutory body or any entity wholly owned by the Government of Zambia or its political subdivisions or local authorities.
4
The competent authorities of the Contracting States shall by mutual agreement settle the
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AI-assisted research summary: The competent authorities of the Contracting States must agree how the limitations in paragraphs 2 and 3 apply, and those paragraphs must not change the company’s tax on the profits used to pay dividends.

4. The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of the limitations of paragraphs 2 and 3. Paragraphs 2 and 3 shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.
5
The term “dividends” as used in this Article means income from shares or other rights, not
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AI-assisted research summary: This section defines “dividends” for this Article.

5. The term “dividends” as used in this Article means income from shares or other rights, not being debtclaims, participating in profits, as well as income from other corporate rights which is subjected to the same taxation treatment as income from shares by the laws of the State of which the company making the distribution is a resident.
6
The provisions of paragraphs 1, 2 and 3 shall not apply if the beneficial owner of the
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AI-assisted research summary: Paragraphs 1 to 3 do not apply when the dividend owner meets the stated residence, business, permanent establishment, and connection conditions; in that case, Article 7 applies.

6. The provisions of paragraphs 1, 2 and 3 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment. In such case the provisions of Article 7 shall apply.
7
Where a company which is a resident of a Contracting State derives profits or income from
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AI-assisted research summary: The other Contracting State may not tax dividends paid by the company, or tax the company’s undistributed profits, subject to stated exceptions.

7. Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company, except in so far as such dividends are paid to a resident of that other State or in so far as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment situated in that other State, nor subject the company’s undistributed profits to a tax on the company’s undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State. Article 11 Interest
1
Section 1
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AI-assisted research summary: Interest from one Contracting State, when paid to a resident of the other Contracting State, may be taxed in that other State.

1. Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
2
However, such interest may also be taxed in the Contracting State in which it arises and
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AI-assisted research summary: Interest may also be taxed in the state where it arises, but the tax on a resident of the other Contracting State cannot exceed 10% of the gross interest.

2. However, such interest may also be taxed in the Contracting State in which it arises and according to the laws of that State, but if the beneficial owner of the interest is a resident of the other Contracting State, the tax so charged shall not exceed 10 per cent of the gross amount of the interest.
3
Notwithstanding the provisions of paragraph 2, interest arising in a Contracting State and
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AI-assisted research summary: Interest paid to a qualifying resident of the other Contracting State is taxable only in that other State, if it is paid to specified public or pension institutions.

3. Notwithstanding the provisions of paragraph 2, interest arising in a Contracting State and paid to a resident of the other Contracting State who is the beneficial owner thereof shall be taxable only in that other State to the extent that such interest is paid to: (a) in the case of Switzerland: (i) the Central Bank of Switzerland; (ii) a pension scheme as listed in clauses (i) to (iv) of subparagraph (b) of paragraph 2 of the protocol to this Convention; and 9th October, 2020 Statutory Instruments 513 (iii) a statutory body or any entity wholly owned by the Government of Switzerland or its political subdivisions or local authorities; and (b) in the case of Zambia: (i) the Central Bank of Zambia; (ii) a pension scheme as listed in clauses (i) to (iv) of subparagraph a) of paragraph 2 of the protocol to this Convention; and (iii) a statutory body or any entity wholly owned by the Government of Zambia or its political subdivisions or local authorities.
4
The competent authorities of the Contracting States shall by mutual agreement settle the
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AI-assisted research summary: The competent authorities of the Contracting States must, by mutual agreement, settle how the limitations in paragraphs 2 and 3 apply.

4. The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of the limitations of paragraphs 2 and 3.
5
The term “interest” as used in this Article means income from debtclaims of every kind,
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AI-assisted research summary: This provision defines “interest” as income from debt claims and related securities, and excludes late-payment penalty charges from that meaning.

5. The term “interest” as used in this Article means income from debtclaims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor’s profits, and in particular, income from government securities and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures. Penalty charges for late payment shall not be regarded as interest for the purpose of this Article.
6
The provisions of paragraphs 1, 2 and 3 shall not apply if the beneficial owner of the
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AI-assisted research summary: Paragraphs 1, 2, and 3 do not apply when the beneficial owner meets the listed residence, business, permanent establishment, and effective-connection conditions.

6. The provisions of paragraphs 1, 2 and 3 shall not apply if the beneficial owner of the interest, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises, through a permanent establishment situated therein and the debt claim in respect of which the interest is paid is effectively connected with such permanent establishment. In such case the provisions of Article 7 shall apply.
7
Section 7
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AI-assisted research summary: Interest is treated as arising in a Contracting State if the payer is resident there, or if the payer has a permanent establishment there and the interest is tied to and borne by that establishment.

7. Interest shall be deemed to arise in a Contracting State when the payer is a resident of that State. Where, however, the person paying the interest, whether that person is a resident of a Contracting State or not, has in a Contracting State a permanent establishment in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment, then such interest shall be deemed to arise in the State in which the permanent establishment is situated.
8
Where, by reason of a special relationship between the payer and the beneficial owner or
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AI-assisted research summary: If interest paid is inflated because of a special relationship, the Article applies only to the arm’s-length amount.

8. Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the interest, having regard to the debtclaim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the lastmentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Convention. Article 12 Royalties
1
Royalties arising in a Contracting State and paid to a resident of the other Contracting State
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AI-assisted research summary: Royalties arising in one Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

1. Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
2
However, such royalties may also be taxed in the Contracting State in which they arise,
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AI-assisted research summary: Royalties may be taxed in the source Contracting State, but if the beneficial owner is resident in the other Contracting State, the tax cannot exceed 5% of the gross royalties.

2. However, such royalties may also be taxed in the Contracting State in which they arise, and according to the laws of that State, but if the beneficial owner of the royalties is a resident of the other Contracting State, the tax so charged shall not exceed 5 per cent of the gross amount of the royalties. The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of this limitation.
3
The term “royalties” as used in this Article means payments of any kind received as a
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AI-assisted research summary: This section defines “royalties” as certain payments made for using, or having the right to use, specified intellectual property and related know-how.

3. The term “royalties” as used in this Article means payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work including cinematograph films, any patent, trade mark, design or model, plan, secret formula or process, or for information concerning industrial, commercial or scientific experience. 514 Statutory Instruments 9th October, 2020
4
The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the
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AI-assisted research summary: Paragraphs 1 and 2 do not apply in a case involving a royalty beneficiary resident with a permanent establishment linked to the royalty right or property; instead, Article 7 applies.

4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties arise, through a permanent establishment situated therein and the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment. In such case the provisions of Article 7 shall apply.
5
Royalties shall be deemed to arise in a Contracting State when the payer is a resident of
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AI-assisted research summary: Royalties are treated as arising in a Contracting State if the payer is resident there, or if the payer has a permanent establishment there that is connected to the royalty and bears it.

5. Royalties shall be deemed to arise in a Contracting State when the payer is a resident of that State. Where, however, the person paying the royalties, whether that person is a resident of a Contracting State or not, has in a Contracting State a permanent establishment with which the right or property in respect of which the royalties are paid is effectively connected, and such royalties are borne by such permanent establishment, then such royalties shall be deemed to arise in the State in which the permanent establishment is situated.
6
Where, by reason of a special relationship between the payer and the beneficial owner or
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AI-assisted research summary: If related parties set royalties above an arm's-length amount, Article 6 applies only to the arm's-length amount.

6. Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the royalties, having regard to the use, right or information for which they are paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the lastmentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Convention. Article 13 Capital Gains

Part

part of the payments shall remain taxable according to the laws of each Contracting State, due

1
Gains derived by a resident of a Contracting State from the alienation of immovable
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AI-assisted research summary: A resident of a Contracting State’s gains from selling certain immovable property in the other Contracting State may be taxed in that other State.

1. Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 and situated in the other Contracting State may be taxed in that other State.
2
Gains from the alienation of movable property forming part of the business property of a
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AI-assisted research summary: The other State may tax gains from selling movable property that is part of a permanent establishment’s business property, including gains from selling the permanent establishment itself.

2. Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State, including such gains from the alienation of such a permanent establishment (alone or with the whole enterprise), may be taxed in that other State.
3
Gains of an enterprise of a Contracting State from the alienation of ships or aircraft
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AI-assisted research summary: Gains from selling ships, aircraft, or related movable property used in international traffic are taxable only in that State.

3. Gains of an enterprise of a Contracting State from the alienation of ships or aircraft operated in international traffic or movable property pertaining to the operation of such ships or aircraft, shall be taxable only in that State.
4
Gains derived by a resident of a Contracting State from the alienation of shares deriving
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AI-assisted research summary: Gains from selling shares that mainly derive their value from immovable property in the other Contracting State may be taxed there, unless an exception applies.

4. Gains derived by a resident of a Contracting State from the alienation of shares deriving more than 50 per cent of their value directly or indirectly from immovable property situated in the other Contracting State may be taxed in that other State. The provisions of the preceding sentence shall not apply to gains: (a) from the alienation of shares quoted on a stock exchange established in either Contracting State or on a stock exchange as may be agreed by the competent authorities of the Contracting States; or (b) from the alienation of shares in a company the value of which consist of more than 50 per cent of immovable property, in which the company carries on its business.
5
Gains from the alienation of any property other than that referred to in paragraphs 1, 2, 3
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AI-assisted research summary: Gains from selling other property are taxable only in the Contracting State where the alienator is resident.

5. Gains from the alienation of any property other than that referred to in paragraphs 1, 2, 3 and 4, shall be taxable only in the Contracting State of which the alienator is a resident. Article 14 Income from Employment
1
Subject to the provisions of Articles 15, 17 and 18, salaries, wages and other similar
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AI-assisted research summary: Employment remuneration of a resident is taxable only in that resident’s state, unless the employment is exercised in the other Contracting State.

1. Subject to the provisions of Articles 15, 17 and 18, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State. 9th October, 2020 Statutory Instruments 515
2
Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a
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AI-assisted research summary: Employment remuneration is taxable only in the firstmentioned State if three conditions are met: the worker is in the other State for no more than 183 days, the employer is not a resident of the other State, and the pay is not borne by a permanent establishment there.

2. Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the firstmentioned State if: (a) the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in any twelvemonth period commencing or ending in the fiscal year concerned; (b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State; and (c) the remuneration is not borne by a permanent establishment which the employer has in the other State.
3
Notwithstanding the preceding provisions of this Article, remuneration derived in respect
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AI-assisted research summary: Employment income from work aboard ships or aircraft in international traffic may be taxed in that State, and directors’ fees may be taxed in the other State.

3. Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment exercised aboard a ship or aircraft operated in international traffic, by an enterprise of the Contracting State may be taxed in that State. Article 15 Directors’ fees Directors’ fees and other similar payments derived by a resident of a Contracting State in that person’s capacity as a member of the board of directors of a company which is a resident of the other Contracting State may be taxed in that other State. Article 16 Entertainers and Sportspersons
1
Notwithstanding the provisions of Article 14, income derived by a resident of a Contracting
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AI-assisted research summary: Income a resident earns as an entertainer or sportsperson from personal activities in the other Contracting State may be taxed there, despite Article 14.

1. Notwithstanding the provisions of Article 14, income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or television artiste, or a musician, or as a sportsperson, from that person’s personal activities as such exercised in the other Contracting State, may be taxed in that other State.
2
Where income in respect of personal activities exercised by an entertainer or a sportsperson
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AI-assisted research summary: Income from an entertainer’s or sportsperson’s personal activities may be taxed in the Contracting State where those activities are performed.

2. Where income in respect of personal activities exercised by an entertainer or a sportsperson in that person’s capacity as such accrues not to the entertainer or sportsperson but to another person, that income may, notwithstanding the provisions of Articles 7 and 14, be taxed in the Contracting State in which the activities of the entertainer or sportsperson are exercised. The provisions of the preceding sentence shall not apply if it is established that neither the entertainer or the sportsperson, nor persons related to the entertainer or sportsperson, participate directly in the profits of such person.
3
Section 3
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AI-assisted research summary: Income from certain activities in the other Contracting State is exempt from tax there if the visit is publicly funded or covered by a cultural agreement.

3. Income derived by a resident of a Contracting State from activities exercised in the other Contracting State as envisaged in paragraphs 1 and 2, shall be exempt from tax in that other State if the visit to that other State is supported wholly or mainly by public funds of the firstmentioned Contracting State, a political subdivision or a local authority thereof, or takes place under a cultural agreement or arrangement between the Governments of the Contracting States. Article 17 Pensions Pensions and other similar remuneration arising in a Contracting State and paid to a resident of the other Contracting State in consideration of past employment may be taxed in the State in which they arise, and according to the laws of that State. Article 18 Government service
1
Section 1
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AI-assisted research summary: This rule says certain salaries, wages, and similar pay are taxable only in the State that pays them, unless the services are performed in the other Contracting State and the worker meets specified resident/national conditions.

1. (a) salaries, wages and other similar remuneration paid by a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State. 516 Statutory Instruments 9th October, 2020 (b) however, such salaries, wages and other similar remuneration shall be taxable only in the other Contracting State if the services are rendered in that State and the individual is a resident of that State who: (i) is a national of that State; or (ii) did not become a resident of that State solely for the purpose of rendering the services.
2
The provisions of Articles 14, 15 and 16 shall apply to salaries, wages, and other similar
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AI-assisted research summary: Articles 14, 15 and 16 apply to salaries, wages, and similar pay for services connected with a business carried on by a Contracting State, its political subdivision, or local authority.

2. The provisions of Articles 14, 15 and 16 shall apply to salaries, wages, and other similar remuneration in respect of services rendered in connection with a business carried on by a Contracting State or a political subdivision or a local authority thereof. Article 19 Students and Business Apprentices Payments which a student or business apprentice who is or was immediately before visiting a Contracting State a resident of the other Contracting State and who is present in the first mentioned State solely for the purpose of that individual’s education or training receives for the purpose of that individual’s maintenance, education or training shall not be taxed in that State, provided that such payments arise from sources outside that State. Article 20 Other Income
1
Section 1
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AI-assisted research summary: Income items of a resident are taxable only in that resident’s State, if they are not dealt with in earlier Convention articles.

1. Items of income of a resident of a Contracting State, wherever arising, not dealt with in the foregoing Articles of this Convention shall be taxable only in that State.
2
The provisions of paragraph 1 shall not apply to income, other than income from immovable
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AI-assisted research summary: Paragraph 1 does not apply to certain income when the recipient is a resident of a Contracting State, carries on business in the other Contracting State through a permanent establishment, and the income is effectively connected with that establishment.

2. The provisions of paragraph 1 shall not apply to income, other than income from immovable property as defined in paragraph 2 of Article 6, if the recipient of such income, being a resident of a Contracting State, carries on business in the other Contracting State through a permanent establishment situated therein and the right or property in respect of which the income is paid is effectively connected with such permanent establishment. In such case the provisions of Article 7 shall apply. Article 21 Entitlement to Benefits Notwithstanding the other provisions of this Convention, a benefit under this Convention shall not be granted in respect of an item of income if it is reasonable to conclude, having regard to all relevant facts and circumstances, that obtaining that benefit was one of the principal purposes of any arrangement or transaction that resulted directly or indirectly in that benefit, unless it is established that granting that benefit in these circumstances would be in accordance with the object and purpose of the relevant provisions of this Convention. Article 22 Elimination of Double Taxation
1
Section 1
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AI-assisted research summary: Switzerland must exempt certain income of Swiss residents that may be taxed in Zambia, allow relief on request for certain dividends, interest, and royalties, and give a Swiss company the same relief for dividends from a Zambian company, subject to stated exceptions.

1. In the case of Switzerland, double taxation shall be avoided as follows: (a) where a resident of Switzerland derives income which, in accordance with the provisions of this Convention, may be taxed in Zambia, Switzerland shall, subject to the provisions of subparagraph b), exempt such income from tax but may, in calculating tax on the remaining income of that resident, apply the rate of tax which would have been applicable if the exempted income had not been so exempted. However, such exemption shall apply to gains referred to in paragraph 4 of Article 13 only if actual taxation of such gains in Zambia is demonstrated. (b) where a resident of Switzerland derives dividends, interest or royalties which, in accordance with the provisions of Articles 10, 11 or 12, maybe taxed in Zambia, Switzerland shall allow, upon request, a relief to such resident. The relief may consist of: 9th October, 2020 Statutory Instruments 517 (i) a deduction from the tax on the income of that resident of an amount equal to the tax levied in Zambia in accordance with the provisions of Articles 10, 11 and 12; such deduction shall not, however, exceed that part of the Swiss tax, as computed before the deduction is given, which is appropriate to the income which may be taxed in Zambia; or (ii) a lump sum reduction of the Swiss tax; or (iii) a partial exemption of such dividends, interest or royalties from Swiss tax, in any case consisting at least of the deduction of the tax levied in Zambia from the gross amount of the dividends, interest or royalties; Switzerland shall determine the applicable relief and regulate the procedure in accordance with the Swiss provisions relating to the carrying out of international conventions of the Swiss Confederation for the avoidance of double taxation. (c) a company which is a resident of Switzerland and which derives dividends from a company which is a resident of Zambia shall be entitled, for the purposes of Swiss tax with respect to such dividends, to the same relief which would be granted to the company if the company paying the dividends were a resident of Switzerland. (d) the provisions of subparagraph a) shall not apply to income derived by a resident of a Contracting State where the other Contracting State applies the provisions of this Convention to exempt such income from tax or applies the provisions of paragraph 2 of Article 10 or paragraph 2 of Article 11 or paragraph 2 of Article 12 of such income.
2
Section 2
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AI-assisted research summary: For a resident of Zambia with income from Switzerland, Swiss tax paid on that income must be credited against Zambian tax, but only up to the Zambian tax attributable to that income.

2. In the case of Zambia, double taxation shall be avoided as follows: Where a resident of Zambia derives income from Switzerland which may be taxed in Switzerland in accordance with the provisions of this Convention, the amount of the Swiss tax payable in respect of that income shall be allowed as a credit against Zambian tax imposed on that resident. The amount of credit, however, shall not exceed that part of Zambian tax which is applicable to that income. Article 23 NonDiscrimination
1
Nationals of a Contracting State shall not be subjected in the other Contracting State to any
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AI-assisted research summary: A Contracting State must not tax nationals of the other Contracting State more heavily, or impose more burdensome connected requirements, than it applies to its own nationals in the same circumstances.

1. Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith, which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances, in particular with respect to residence, are or may be subjected. This provision shall, notwithstanding the provisions of Article l, also apply to persons who are not residents of one or both of the Contracting States.
2
The taxation on a permanent establishment which an enterprise of a Contracting State has
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AI-assisted research summary: Tax on a permanent establishment in the other Contracting State must not be less favorably levied than tax on local enterprises carrying on the same activities.

2. The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities. This provision shall not be construed as obliging a Contracting State to grant to residents of the other Contracting State any personal allowances, reliefs and reductions for taxation purposes on account of civil status or family responsibilities which it grants to its own residents.
3
Except where the provisions of paragraph 1 of Article 9, paragraph 8 of Article 11, or
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AI-assisted research summary: An enterprise of a Contracting State may deduct interest, royalties, and other disbursements paid to a resident of the other Contracting State, subject to specified treaty exceptions and the same conditions as if paid to a resident of the firstmentioned State.

3. Except where the provisions of paragraph 1 of Article 9, paragraph 8 of Article 11, or paragraph 6 of Article 12, apply, interest, royalties and other disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable profits of such enterprise, be deductible under the same conditions as if they had been paid to a resident of the firstmentioned State.
4
Enterprises of a Contracting State, the capital of which is wholly or partly owned or
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AI-assisted research summary: A State must not tax certain foreign-owned or foreign-controlled enterprises more heavily than similar domestic enterprises.

4. Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the firstmentioned State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of the firstmentioned State are or may be subjected. 518 Statutory Instruments 9th October, 2020
5
The provisions of this Article shall, notwithstanding the provisions of Article 2, apply to
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AI-assisted research summary: This section says the Article applies to taxes of every kind and description, despite Article 2.

5. The provisions of this Article shall, notwithstanding the provisions of Article 2, apply to taxes of every kind and description. Article 24 Mutual Agreement Procedure
1
Where a person considers that the actions of one or both of the Contracting States result
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AI-assisted research summary: A person may present their case to the competent authority of either Contracting State if they think the States’ actions will cause tax not in line with the Convention.

1. Where a person considers that the actions of one or both of the Contracting States result or will result for that person in taxation not in accordance with the provisions of this Convention, that person may, irrespective of the remedies provided by the domestic law of those States, present that person’s case to the competent authority of either Contracting State. The case must be presented within three years from the first notification of the action resulting in taxation not in accordance with the provisions of this Convention.
2
The competent authority shall endeavour, if the objection appears to it to be justified and
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AI-assisted research summary: If an objection seems justified and the authority cannot reach a satisfactory solution on its own, the competent authority should try to resolve the case by mutual agreement with the other Contracting State’s competent authority.

2. The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation which is not in accordance with this Convention.
3
The competent authorities of the Contracting States shall endeavour to resolve by mutual
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AI-assisted research summary: The competent authorities of the Contracting States should try to settle interpretation or application issues by mutual agreement and may consult to eliminate double taxation in cases not covered by the Convention.

3. The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of this Convention. They may also consult together for the elimination of double taxation in cases not provided for in this Convention.
4
The competent authorities of the Contracting States may communicate with each other
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AI-assisted research summary: The competent authorities of the Contracting States may communicate directly with each other, including through a joint commission, to reach an agreement.

4. The competent authorities of the Contracting States may communicate with each other directly, including through a joint commission consisting of themselves or their representatives, for the purpose of reaching an agreement in the sense of the preceding paragraphs.
5
Where,
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AI-assisted research summary: If the two competent authorities cannot resolve a case within three years, unresolved issues can go to arbitration when either authority requests it, unless a court or tribunal has already decided them.

5. Where, (a) under paragraph 1, a person has presented a case to the competent authority of a Contracting State on the basis that the actions of one or both of the Contracting States have resulted for that person in taxation not in accordance with the provisions of this Convention; and (b) the competent authorities are unable to reach an agreement to resolve that case pursuant to paragraph 2 within three years from the presentation of the case to the competent authority of the other Contracting State; any unresolved issues arising from the case shall be submitted to arbitration if either competent authority so requests. The person who has presented the case shall be notified of the request. These unresolved issues shall not, however, be submitted to arbitration if a decision on these issues has already been rendered by a court or administrative tribunal of either State. The arbitration decision shall be binding on both States and shall be implemented notwithstanding any time limits in the domestic laws of these States unless both competent authorities agree on a different solution within six months after the decision has been communicated to them or unless a person directly affected by the case does not accept the mutual agreement that implements the arbitration decision. The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of this paragraph.
6
The Contracting States may release to the arbitration board, established under the provisions
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AI-assisted research summary: The Contracting States may give necessary information to the arbitration board, and the board members must follow the disclosure limits in Article 25.

6. The Contracting States may release to the arbitration board, established under the provisions of paragraph 5, such information as is necessary for carrying out the arbitration procedure. The members of the arbitration board shall be subject to the limitations of disclosure described in paragraph 2 of Article 25 with respect to the information so released. Article 25 Exchange of Information
1
The competent authorities of the Contracting States shall exchange such information as is
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AI-assisted research summary: The competent authorities of the Contracting States must exchange foreseeably relevant information for this Convention and related tax-law administration or enforcement, subject to the stated condition that the taxation is not contrary to the Convention.

1. The competent authorities of the Contracting States shall exchange such information as is foreseeably relevant for carrying out the provisions of this Convention or to the administration or enforcement of the domestic laws concerning taxes covered by this Convention in so far as the taxation thereunder is not contrary to this Convention. The exchange of information is not restricted by Article 1. 9th October, 2020 Statutory Instruments 519
2
Any information received under paragraph 1 by a Contracting State shall be treated as
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AI-assisted research summary: Tax information received by a Contracting State must be kept secret and disclosed only for specified tax-administration purposes, with limited exceptions.

2. Any information received under paragraph 1 by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to the taxes referred to in paragraph 1. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions. Notwithstanding the foregoing, information received by a Contracting State may be used for other purposes when such information may be used for such other purposes under the laws of both States and the competent authority of the supplying State authorises such use.
3
Section 3
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AI-assisted research summary: This provision says the earlier paragraphs must not be read to require a Contracting State to take certain administrative measures or provide certain information.

3. In no case shall the provisions of paragraphs 1 and 2 be construed so as to impose on a Contracting State the obligation: (a) to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State; (b) to supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State; (c) to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or information the disclosure of which would be contrary to public policy (Public Order).
4
Section 4
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AI-assisted research summary: If one Contracting State requests information under this Article, the other Contracting State must use its information-gathering measures to get it.

4. If information is requested by a Contracting State in accordance with this Article, the other Contracting State shall use its information gathering measures to obtain the requested information, even though that other State may not need such information for its own tax purposes. The obligation contained in the preceding sentence is subject to the limitations of paragraph 3 but in no case shall such limitations be construed to permit a Contracting State to decline to supply information solely because it has no domestic interest in such information.
5
Section 5
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AI-assisted research summary: A Contracting State cannot refuse to supply information just because it is held by a bank or similar intermediary, or because it concerns ownership interests.

5. In no case shall the provisions of paragraph 3 be construed to permit a Contracting State to decline to supply information solely because the information is held by a bank, other financial institution, nominee or person acting in an agency or a fiduciary capacity or because it relates to ownership interests in a person. Article 26 Members of Diplomatic Missions and Consular Posts Nothing in this Convention shall affect the fiscal privileges of members of diplomatic missions or consular posts under the general rules of international law or under the provisions of special agreements. Article 27 Entry into Force
1
Each Contracting State shall notify to the other, through diplomatic channels, the completion
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AI-assisted research summary: Each Contracting State must notify the other, through diplomatic channels, when it has completed its required domestic procedures for bringing the Convention into force.

1. Each Contracting State shall notify to the other, through diplomatic channels, the completion of the procedures required by its law for the bringing into force of this Convention. This Convention shall enter into force on the date on which the later of those notifications has been received.
2
The provisions of this Convention shall have effect
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AI-assisted research summary: This section says when the Convention starts applying for withheld taxes, other taxes, and Article 25 information, based on the entry into force date.

2. The provisions of this Convention shall have effect: (a) respect of taxes withheld at source on amounts paid or credited on or after the first day of January of the calendar year next following the entry into force of this Convention; (b) in respect of other taxes for taxation years beginning on or after the first day of January of the calendar year next following the entry into force of this Convention; (c) in respect to Article 25, to information that relates to fiscal years or business years beginning on or after the first day of January of the calendar year next following the entry into force of this Convention. Article XX of the Convention between Switzerland and the United Kingdom of 30 September 1954 for the Avoidance of Double Taxation with respect to taxes on Income, extended to the Federation of Rhodesia and Nyasaland by an exchange of notes of 30 May 1961 between Switzerland and the United Kingdom and applicable to the Republic of Zambia, shall continue to be applicable for information regarding the taxable years before and including the year ending on the last day of December of the year this Convention enters into force. 520 Statutory Instruments 9th October, 2020
3
The Convention between Switzerland and the United Kingdom of 30 September 1954 for
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AI-assisted research summary: Either Contracting State may end the Convention by diplomatic notice, but only after the timing rule is met.

3. The Convention between Switzerland and the United Kingdom of 30 September 1954 for the Avoidance of Double Taxation with respect to taxes on Income, extended to the Federation of Rhodesia and Nyasaland by an exchange of notes of 30 May 1961 between Switzerland and the United Kingdom and applicable to the Republic of Zambia, will terminate in respect of the relations between Switzerland and the Republic of Zambia on the date this Convention becomes applicable. Article 28 Termination This Convention shall remain in force until terminated by a Contracting State. Either Contracting State may terminate the Convention, through diplomatic channels, by giving notice of termination at least six months before the end of any calendar year starting five years after the year in which this Convention entered into force. In such event, this Convention shall cease to have effect: (a) in respect of taxes withheld at source on amounts paid or credited on or after the first day of January of the calendar year next following that in which the notice was given; (b) in respect of other taxes for taxation years beginning on or after the first day of January of the calendar year next following that in which the notice was given. IN WITNESS WHEREOF the undersigned, duly authorised thereto, have signed this Convention. Done in duplicate at Lusaka this 29th day of August, 2017 in the French and English languages, both texts being equally authentic. In case there is any divergence of interpretation between the French and the English texts the English text shall prevail. For the Republic of Zambia: For the Swiss Confederation: FELIX C. MUTATI, Minister of Finance ARTHUR MATTLI, Ambassador of Switzerland to the Republic of Zambia 9th October, 2020 Statutory Instruments 521 PROTOCOL The Government of the Republic of Zambia and The Swiss Federal Council Have agreed at the signing at Lusaka on the 29th August, 2017of the Convention between the two States for the avoidance of double taxation with respect to taxes on income and the prevention of tax evasion and avoidance upon the following provisions which shall form an integral part of the said Convention.
1
Section 1
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AI-assisted research summary: Some collective investment vehicles are treated as residents and beneficial owners for this Convention, and a Swiss limited partnership may claim treaty benefits on behalf of its owners unless the owner already claimed them.

1. ad Article 1 (a) notwithstanding the other provisions of this Convention, a collective investment vehicle which is established in a Contracting State and which receives income arising in the other Contracting State shall be treated for purposes of applying the Convention to such income as an individual who is a resident of the Contracting State in which it is established and as the beneficial owner of the income it receives (provided that, if an individual who is a resident of the first mentioned State had received the income in the same circumstances, such individual would have been considered to be the beneficial owner thereof), but only to the extent that the beneficial interests in the collective investment vehicle are owned by residents of the Contracting State in which the collective investment vehicle is established. (b) for purposes of this paragraph, the term “collective investment vehicle” means, in the case of Switzerland, a contractual fund as defined in Article 25 and an investment company with variable capital as defined in Article 36 of the Federal Act on Collective Investment Schemes of 23 June 2006 and, in the case of Zambia, a Collective Investment Scheme as defined in Section 72 of the Securities Act, Chapter 354 of the Laws of Zambia, as well as any other investment fund, arrangement or entity established in either Contracting State which the competent authorities of the Contracting States agree to regard as a collective investment vehicle for purposes of this paragraph. (c) notwithstanding the other provisions of this Convention, a Swiss limited partnership for collective capital investment schemes as defined in Article 98 of the Federal Act on Collective Investment Schemes of 23 June 2006 which receives income arising in Zambia shall not be treated as a resident of Switzerland, but may claim, on behalf of the owners of its beneficial interests, the tax reductions, exemptions or other benefits that would have been available under this Convention to such owners had they received such income directly. It may not make such a claim if the owner has itself made an individual claim for benefits with respect to income received by the partnership.
2
Section 2
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AI-assisted research summary: This provision defines “pension scheme” to include listed schemes in Zambia and Switzerland, plus identical or substantially similar funds established under later legislation.

2. ad subparagraph i of paragraph 1 of Article 3 It is understood that the term “pension scheme” includes the following and any identical or substantially similar funds which are established pursuant to legislation introduced after the date of signature of this Convention: (a) in Zambia, any pension scheme covered by: (i) the National Pension Scheme Act CAP 256; (ii) the Local Authorities Superannuation Fund Act 284; (iii) the Workers Compensation Act No 10 of 1999; (iv) the Public Service Pension Act CAP 260; 522 Statutory Instruments 9th October, 2020 (b) in Switzerland, any pension scheme covered by: (i) the Federal Act on old age and survivors’ insurance, of 20 December 1946; (ii) the Federal Act on disabled persons’ insurance of 19 June 1959; (iii) the Federal Act on supplementary pensions in respect of old age, survivors’ and disabled persons’ insurance of 6 October 2006; (iv) the Federal Act on income compensation allowances in case of service and in case of maternity of 25 September 1952; (v) the Federal Act on old age, survivors’ and disabled persons’ insurance payable in respect of employment or selfemployment of 25 June 1982, including pension funds which offer individual recognised pension plans comparable with occupational pension plans; (vi) the Federal Act on Vested Benefits of 17 December 1993; (vii) paragraph 6 and paragraph 7 of Article 89a of the Swiss Civil Code of 10 December 1907; (viii) paragraph 1 of Article 331 of the Federal Act on the Amendment of the Swiss Civil Code (Part Five: The Code of Obligations) of 30 March 1911.
3
Section 3
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AI-assisted research summary: This provision says that “resident of a Contracting State” includes certain pension schemes and certain organisations with specified purposes.

3. ad Article 4 In respect of paragraph 1 of Article 4, it is understood and confirmed that the term “resident of a Contracting State” includes in particular: (a) a pension scheme established in that State; and (b) an organisation that is established and is operated exclusively for religious, charitable, scientific, cultural, sporting, or educational purposes (or for more than one of those purposes) and that is a resident of that State according to its laws, notwithstanding that all or part of its income or gains may be exempt from tax under the domestic law of that State.
4
Section 4
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AI-assisted research summary: For Article 17, “pensions” includes not only periodic payments but also lump sum payments.

4. ad Article 17 It is understood that the term “pensions” as used in Article 17 does not only cover periodic payments, but also includes lump sum payments.
5
Section 5
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AI-assisted research summary: Pension scheme contributions made by or for an individual working in the other Contracting State must be treated the same as local pension contributions, if the person was not resident there and was already in the scheme before starting work there.

5. ad Articles 17 and 23 As regards Article 17 and Article 23, contributions to a pension scheme of a Contracting State that are made by or on behalf of an individual who renders services in the other Contracting State shall, for the purposes of determining the individual’s tax payable and the profits of an enterprise which may be taxed in that State, be treated in that State in the same way and subject to the same conditions and limitations as contributions made to a pension scheme in that Contracting State, provided that the individual was not a resident of that State, and was participating in the pension scheme, immediately before beginning to provide services in that State.
6
Section 6
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AI-assisted research summary: This provision says tax-information requests should be made only after regular domestic sources are exhausted, and the requesting State must give specified details when asking for information.

6. ad Article 25 (a) it is understood that an exchange of information will only be requested once the requesting Contracting State has exhausted all regular sources of information available under the internal taxation procedure. (b) it is understood that the tax authorities of the requesting State shall provide the following information to the tax authorities of the requested State when making a request for information under Article 25: (i) the identity of the person under examination or investigation; (ii) the period of time for which the information is requested; (iii) a statement of the information sought including its nature and the form in which the requesting State wishes to receive the information from the requested State; 9th October, 2020 Statutory Instruments 523 (iv) the tax purpose for which the information is sought; (v) to the extent known, the name and address of any person believed to be in possession of the requested information. (c) it is understood that the reference to “foreseeable relevance” is intended to provide for exchange of information in tax matters to the widest possible extent and, at the same time, to clarify that the Contracting States are not at liberty to engage in “fishing expeditions” or to request information that is unlikely to be relevant to the tax affairs of a given taxpayer. While subparagraph (b) contains important procedural requirements that are intended to ensure that fishing expeditions do not occur, clauses (i) through (v) of subparagraph (b) nevertheless are not to be interpreted in order to frustrate effective exchange of information. (d) it is understood that Article 25 does not require the Contracting States to exchange information on an automatic or a spontaneous basis. (e) it is understood that in case of an exchange of information, the administrative procedural rules regarding taxpayers’ rights provided for in the requested Contracting State remain applicable. It is further understood that these provisions aim at guaranteeing the taxpayer a fair procedure and not at preventing or unduly delaying the exchange of information process. Done in duplicate at Lusaka this 29th day of August, 2017 in the French and English languages, both texts being equally authentic. In case there is any divergence of interpretation between the French and the English texts the English text shall prevail. For the Republic of Zambia: For the Swiss Confederation: FELIX C. MUTATI, Minister of Finance ARTHUR MATTLI, Ambassador of Switzerland to the Republic of Zambia LUSAKA 6th October,2020 [MFB.6/8/38] EDGAR C. LUNGU, President 524 Statutory Instruments 9th October, 2020

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