Namibia

Country Name: Republic of Namibia
Currency: Namibian Dollar (NAD), pegged to the South African Rand (ZAR)
Primary Tax Authority: Namibia Revenue Agency (NamRA)
Key Legislation:

Income Tax Act
Value Added Tax (VAT) Act
Customs and Excise Act
Investment Promotion Act
Tax Administration Act

Fiscal Authority Allocation

Centralized Fiscal System:
Namibia operates a centralized tax system, with the Namibia Revenue Agency (NamRA) responsible for administering and collecting taxes, including corporate income tax (CIT), personal income tax (PIT), value-added tax (VAT), and customs duties.

Corporate Income Tax (CIT)

Standard Rate: 32% for non-mining companies, 37.5% for mining companies
Namibia imposes a corporate income tax rate of 32% on non-mining resident companies and non-resident companies with a permanent establishment in Namibia. Mining companies, excluding diamond mining, are subject to a higher tax rate of 37.5%. Diamond mining companies are subject to an even higher rate of 55%.

Corporate Forms and Taxation:

Resident Companies: Taxed on worldwide income.
Non-Resident Companies: Taxed only on Namibia-sourced income.

Exemptions and Incentives:

Investment Incentives: Namibia provides tax incentives for companies investing in sectors such as manufacturing, agriculture, tourism, and renewable energy. These incentives include reduced CIT rates, customs duty exemptions, and VAT deferrals on imported machinery and equipment.
Export Processing Zones (EPZs): Companies operating in Namibia’s EPZs benefit from CIT exemptions for up to 10 years, VAT exemptions, and customs duty reductions on imported inputs and machinery.

Goods and Services Tax (GST) / Value-Added Tax (VAT)

Standard Rate: 15%
Namibia imposes VAT at a standard rate of 15% on most goods and services. VAT is applied to domestic production and imports.

Exemptions:
Certain goods and services, such as healthcare, education, and financial services, are VAT-exempt. Exports are zero-rated, allowing businesses to reclaim VAT paid on inputs used to produce export goods.

Personal Income Tax (PIT)

Progressive Rates:
Namibia applies a progressive personal income tax system to residents’ worldwide income and non-residents’ Namibia-sourced income.

Resident Tax Rates for 2023 (Annual Income):

Up to NAD 50,000: 0%
NAD 50,001 to NAD 100,000: 18%
NAD 100,001 to NAD 300,000: 25%
NAD 300,001 to NAD 500,000: 28%
Above NAD 500,000: 37%

Non-Resident Tax Rate:
Non-residents are taxed at a flat rate of 10% to 25% on Namibia-sourced income, depending on the nature of the income.

Deductions and Allowances:
Taxpayers may deduct expenses such as pension contributions, mortgage interest, and charitable donations from taxable income.

Additional Mandatory Contributions

Social Security Contributions:
Employers and employees must contribute to Namibia’s social security system, which covers pensions, healthcare, and other social benefits.

Employer Contribution: 0.9% of gross salary (capped).
Employee Contribution: 0.9% of gross salary (capped).

Withholding Taxes

Dividends: 10% for residents, 20% for non-residents
Interest: 10% for residents, 10% for non-residents
Royalties: 10% for residents, 10% for non-residents
Namibia imposes withholding taxes on payments to non-residents, including dividends, interest, and royalties. These rates may be reduced under Namibia’s double taxation agreements (DTAs).

Transfer Pricing Rules

Namibia follows the arm’s-length principle for transactions between related parties. Companies must ensure that cross-border transactions between related entities are conducted at market value. Transfer pricing documentation is required for large multinational companies operating in Namibia.

Special Tax Regimes

Export Processing Zones (EPZs): Companies operating in Namibia’s EPZs benefit from CIT exemptions for up to 10 years, VAT exemptions, and customs duty relief on imported inputs and capital goods. The aim is to attract export-oriented industries and boost foreign direct investment (FDI).
Mining Sector: Mining companies, especially those involved in diamond mining, are subject to specific tax regimes, including higher CIT rates, mineral royalties, and custom exemptions on imported mining equipment.

Other Taxes

Customs Duties: Namibia, as a member of the Southern African Customs Union (SACU), applies customs duties based on the SACU Common External Tariff. Rates vary depending on the type of goods. Essential goods and raw materials may qualify for reduced or zero customs duties.
Excise Taxes: Excise taxes are levied on alcohol, tobacco, fuel, and luxury items.
Property Tax: Namibia imposes property taxes on land and buildings, which are assessed and collected by local authorities. The tax rates vary depending on the location and value of the property.

Double Taxation Agreements (DTAs)

Namibia has signed several double taxation agreements (DTAs) with countries including South Africa, Mauritius, and Germany. These agreements help reduce withholding taxes on cross-border income and prevent double taxation of income earned in Namibia and other jurisdictions.

Local Taxes

Local governments in Namibia may impose property taxes, business license fees, and municipal service levies. However, most major taxes, such as CIT, PIT, and VAT, are centrally administered by Namibia Revenue Agency (NamRA).

Compliance and Reporting

Annual Filing:
Corporate tax returns must be filed within seven months after the end of the financial year. Personal income tax returns are generally due by June 30th. VAT returns are filed monthly or quarterly, depending on the size of the business.

Penalties for Late Filing:
Penalties for non-compliance or late filing include fines and interest on unpaid taxes. The NamRA charges interest at 1% per month on overdue tax amounts, with additional penalties for underreporting or evading taxes.

Recent Developments

Mining Sector Focus:
Namibia is heavily reliant on its mining sector, particularly diamonds and uranium. The government continues to promote investment in mining by offering tax incentives such as CIT reductions and VAT exemptions on mining equipment.

Renewable Energy Initiatives:
The government is encouraging investment in renewable energy projects, particularly solar and wind energy, by offering tax incentives. Companies investing in renewable energy infrastructure may benefit from CIT holidays, VAT exemptions, and customs duty reductions.

Digital Taxation and E-Government:
Namibia is modernizing its tax administration by introducing electronic filing systems and promoting the use of digital tax platforms. This initiative aims to increase compliance and improve the efficiency of tax collection.

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