A new requirement for recording IP assignments
In order to record the assignment of an IP right in Zambia it is now necessary to submit a Tax Clearance Certificate issued by the Zambia Revenue Authority (ZRA) – this is in terms of the Property Transfer Tax Amendment Act No. 11 of 2017.
Please note that it has only recently been made clear that the 2017 legislation applies to Zambian IP rights that are owned by foreigners. Appeals have been submitted in an attempt to reverse this decision and we will issue a further update when there is news.
A Tax Clearance Certificate – the process
The process of obtaining the Tax Clearance Certificate is as follows:
1. Both the Assignor and Assignee are required to obtain Taxpayer’s identification numbers (Tpin number) from ZRA to enable the Assignor to submit the Property Transfer Tax application.
The requirements for obtaining a Tpin number are as follows;
- Non-Resident Companies will be required to register as a Foreign Company at PACRA and obtain a certificate of registration attesting to this which they must submit along with a PACRA Form 38.
- Non-Resident Individuals will be required to submit a copy of their passport and provide their residential address.
2. Documents to be submitted to ZRA to obtain the Tax Clearance Certificate:
- Tpin number (see above).
- Certificate of Registration relating to the trade mark/s concerned.
- Transfer of Intellectual Property Right Form (Form 17)
- Assignment Deed
3. ZRA will determine tax payable at 5% of the determined value of the IP rights using their own methodologies.
4. Upon payment of the required tax, the Tax Clearance Certificate is generated which may then be submitted to PACRA with the assignment recordal formalities.
For new matters, our clients should obtain the required Certificate from the ZRA after which we will be able to proceed with the Recordal of the Assignment at the Registry. Alternatively, we are also holding a number of matters in suspense where our clients do not wish to obtain the Certificate at this time, awaiting any further decision from the ZRA.