By 
Nestlé Zambia has been ordered to pay K13.8 million to the Zambia Revenue Authority (ZRA) following a Supreme Court ruling delivered on August 20, 2025.
The ruling, in favour of ZRA, stemmed from a transfer pricing audit into Nestlé Zambia Trading Limited’s operations after the company reported losses for five consecutive years between 2010 and 2014.
According to a statement issued in Lusaka on Thursday by ZRA Corporate Communications Manager, Oliver Nzala, the Authority had issued an assessment adjusting Nestlé Zambia’s profit to K56.5 million and levied a gross tax of K13.8 million.
Nestlé Zambia had appealed to the Tax Appeals Tribunal, raising six grounds of appeal, including allegations of wrongful assessment by ZRA, failure to objectively evaluate related-party transactions, and reliance on inappropriate comparables from the Western world.
The company also contested its characterization as a “limited risk distributor” and ZRA’s treatment of unrealized foreign exchange losses.
The Tribunal ruled in favour of Nestlé Zambia on five of the six grounds.
However, ZRA appealed to the Supreme Court, arguing that the Tribunal erred in law by improperly shifting the burden of proof and by requiring transactions with related parties to be tested individually rather than aggregated, contrary to internationally accepted transfer pricing guidelines.
In delivering judgment, Supreme Court Judge Kajimanga Kabuka Chisanga upheld ZRA’s arguments, ruling that they were supported by evidence and facts presented at trial.
“Nestlé will now have to pay its tax liability of K13,860,103,” Nzala stated.
WARNING! All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express permission from ZAMBIA MONITOR.
Comments