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HMRC internal manual

Double Taxation Relief Manual

Zambia: Underlying Tax

 1 Documents needed to support the underlying tax claim

The accounts showing the profits out of which the dividend was paid and the notice of assessment to income tax will be required by the Underlying Tax Group. Profits for the year ended 31 December 2008 are assessed in the tax year ended 31 March 2009.

 2 Reserves

Relevant profits are reduced by transfers to the statutory reserve until the reserve equals paid up capital. While, relevant profits are increased by realisations of revaluation/capital reserves transferred to retained earnings.

 3 Spared tax

The calculation of tax spared prepared by the Zambian company’s accountants should be provided to the Underlying Tax Group together with the certificate granting tax sparing status.