Namibia personal Income Tax
Individual income tax rates in Namibia are progressive to 37%.
Taxable income (N$) Tax Rate
Up to 40,000 0%
40,001 to 80,000 27% on amount exceeding N$40,000
80,001 to 200,000 N$10,800 plus 32% on amount exceeding N$80,000
200,000 to 750,000 N$49,200 plus 34% on amount exceeding N$200,000
Over 750,000 N$236,200 plus 37% on amount exceeding N$750,000
Namibia tax year runs from 1 March to 28 February.
Basis – Resident and nonresident individuals are taxable on all income received or accrued from a Namibian source or deemed source that is not of a capital nature.
Residence – The tax treatment of residents and nonresidents is normally the same. Questions of residence generally are not relevant except when the nonresident is from a country that has concluded a tax treaty with Namibia.
Tax Filing status – Namibia employs a self assessment tax regime where spouses are taxed separately on their income.
Taxable income – Taxable income is an individual’s gross income, less exempt income and deductions.
Capital gains – Capital gains are not normally taxable in Namibia.
Tax Deductions and tax allowances – Individuals may deduct contributions to approved pension funds, provident funds and retirement annuity funds, and premiums with respect to educational policies, subject to an aggregate limit of NAD 40,000. No deductions are granted to individuals for medical expenses (employers liable for such expenses may deduct them, subject to certain limits).
Other taxes on individuals:
Capital duty – No
Stamp duty – Stamp duty is imposed on various instruments, such as a transfer of shares, transfer deeds and partnership agreements, at scheduled rates.
Capital acquisitions tax – No
Real property tax – No
Inheritance/estate tax – No
Net wealth/net worth tax – No
Social security contributions – Both employers and employees are required to make social security contributions at a rate of 0.9% of the employee’s basic salary income up to a maximum of NAD 54 per month. Employers must make employees compensation contributions for employees whose pay is below a specified threshold.
Administration and compliance:
Namibia Tax year – Namibia tax year for individuals is 1 March to 28 February.
Tax Filing and tax payment – Salaried individuals must file their returns by the end of June. Tax on employment income is withheld by the employer under the pay-as-you earn system and remitted on a monthly basis to the Receiver of Revenue. Individuals who derive income from business or farming activities must register as provisional taxpayers. For non-farmers, 2 provisional tax payments are due on 31 August and 28 February. Farmers must make 1 provisional tax payment on 28 February. Final tax returns must be filed by the end of September.
Penalties – Taxpayers who file their tax returns late or fail to file are subject to various penalties.
Namibia Corporate Tax
General corporation tax rate in Namibia is 35%.
Mining companies (including mining service companies), excluding those mining diamonds and petroleum, pay tax at a flat rate of 37.5%. The effective tax rate for diamond mining and diamond mining services companies is 55%. Tax rate for petroleum mining companies is 35%. Nonmining income earned by mining companies is taxed at 35%. Recoupment of mining assets is taxed at the mining tax rate. The tax rate for registered manufacturers is 18% for a 10-year period. Recoupment of manufacturing assets is taxed at the manufacturing tax rate.
Residence – A corporation is resident if it is incorporated in Namibia.
Basis – Resident and nonresident entities are subject to Namibian income tax only on taxable income arising in, or deemed to arise from, a source within Namibia.
Taxable income – Taxable income is calculated as gross income, less exempt income and deductions. Gross income is the total amount in cash or otherwise, received or accrued during the tax year from a source within or deemed to be within Namibia, excluding receipts or accruals of a capital nature. Certain amounts are specifically included in gross income regardless of their source or capital nature.
Taxation of dividends – Dividends received by residents are exempt from income tax, with the exception of certain Namibian building society dividends.
Capital gains – There is no tax on capital gains arising or deemed to arise from a source within Namibia.
Losses – Tax losses may be carried forward indefinitely for set off against future taxable income, provided the entity does not cease to trade. Losses may not be carried back.
Surtax – No
Alternative minimum tax – No
Foreign tax credit – A foreign tax credit may be obtained only for tax paid to jurisdictions with which Namibia has concluded a tax treaty.
Participation exemption – No
Holding company regime – No
Tax Incentives – A number of incentives are available, such as manufacturing and export incentives and Export Processing Zones. These tax incentives are generally designed to assist manufacturers or exporters, encourage employment, bolster Namibia’s foreign reserves and promote Namibia as a trade centre for the region. Additionally, tax depreciation allowances are granted for the construction of buildings and the acquisition of capital equipment. Dividends received by Namibian companies from outside Namibia are not subject to nonresident shareholders’ tax (NRST) upon redistribution to foreign shareholders.
Dividends – Dividends paid to nonresidents and certain foreign held residents are subject to NRST at 10%, unless the rate is reduced under an applicable tax treaty.
Interest – Both residents and nonresidents are taxable on Namibian interest income (subject to certain exemptions and tax treaty relief). As from 1 March 2009, Namibian registered banks and Namibian-registered unit trust management companies are required to withhold a final tax of 10% from interest accruing to an individual, trust, non-Namibian company and the estate of a deceased person., Namibian companies and entities that are normally exempt from tax (e.g. pension funds) are excluded from this requirement).
Royalties – Royalties paid to nonresidents are subject to a withholding tax of 10.5%, unless the rate is reduced under an applicable tax treaty.
Branch remittance tax – Profit distributions by local branches are not subject to NRST or other branch profits tax. However, NRST is payable when Namibian branch profits are distributed as dividends by the nonresident head office.
Other taxes on corporations:
Capital duty – No
Payroll tax – Tax on employment income must be withheld by the employer under the pay-as-you earn system and remitted on a monthly basis to the Receiver of Revenue.
Real property tax – No
Social security – Both employers and employees are required to make social security contributions at a rate of 0.9% of the employee’s basic salary income up to a maximum of NAD 54 per month. Employers must make employees compensation contributions for employees whose pay is below a specified threshold.
Stamp duty – Stamp duty is imposed on various instruments, such as the transfer of shares, transfer deeds and partnership agreements, at scheduled rates.
Transfer tax – Transfer duties are imposed on the sale of real property.
Transfer pricing – Transfer pricing rules apply when transactions between related parties are not carried out on arm’s length terms.
Thin capitalisation – Thin capitalisation rules have been introduced, but no ratio has been confirmed by the revenue authorities. For practical purposes, the exchange control regulation ratio (i.e. 3:1 debt-to-equity) is used for tax purposes.
Controlled foreign companies – No
Other – The Minister of Finance has authority to redetermine a taxpayer’s liability upon a determination that a transaction or scheme has not been entered into at arm’s length, or otherwise has the effect of avoiding or postponing a tax liability.
Disclosure requirements – No
Administration and compliance:
Namibia Tax year – Namibia tax year corresponds to a corporation’s financial year.
Consolidated tax returns – There is no system of group taxation in Namibia. Taxable entities are taxed separately.
Tax Filing requirements – Provisional tax returns are due 6 months after the beginning of a corporation’s financial year and at year end. Final tax returns, together with a computation of taxable income and the payment of any corporation tax owed for the relevant tax year, are due within 7 months after the taxpayer’s year end. Reasonable extensions may be granted to submit tax returns.
Penalties – Taxpayers that file their tax returns late or fail to file are subject to various penalties.
Rulings – A ruling may be obtained from the tax authorities, if required.
Namibia vat (Value Added Tax) Rate
The standard rate of VAT in Namibia is 15%. Certain goods and services are zero-rated, such as direct exports of goods, international transport services, sales of businesses as going concerns, certain services rendered to nonresident persons and sales of some basic food items.
Taxable transactions – VAT is imposed on the supply and import of most goods and services.
Registration for VAT – Enterprises with turnover of NAD 200,000 or more of taxable supplies in any 12-month period are required to register for VAT purposes.
Filing and VAT payment – VAT returns must be filed bimonthly.