Namibia, Republic of

Corporate - Withholding taxes

Last reviewed - 13 December 2019

WHTs are applicable where certain payments are made to non-Namibian residents.

Dividends

Dividends declared by a Namibian company to a non-resident holding company are subject to NRST, a WHT. NRST is payable at the standard rate of 10% if at least 25% of shares are held in the Namibian company and the shareholder is a company. In all other cases, the NRST payable is 20%. DTA relief may be available.

NRST is payable within 20 days after declaration of a dividend.

Interest

A WHT of 10%, calculated on the gross amount of interest, is payable on interest accruing to any person, other than a Namibian company, from a registered Namibian banking institution or unit trust scheme. The tax withheld is a final tax, and the financial institution is responsible to withhold the tax.

Namibian companies, however, are taxed on interest at the corporate tax rate.

It is the obligation of the financial institution to withhold the tax and pay such tax to the revenue authorities.

WHT of 10% is payable on the interest accruing or paid to a non-resident. The WHT is payable within 20 days after the interest payment was made. Interest is deemed to be paid on the earlier of the date on which the interest is paid or becomes due and payable.

Treaty relief may be available.

Royalties or similar payments

WHT on royalties are payable when a Namibian company pays a royalty to a non-resident. WHT is levied at a fixed rate of 10% and is payable within 20 days after the end of the month during which the liability for payment is incurred.

A royalty includes payment for the use or right to use any patent or design, trademark, copyright, model, pattern, plan, formula, or process, or any other property or right of a similar nature. A royalty also includes the imparting of any scientific, technical, industrial, or commercial knowledge or information for use in Namibia. The nature of fees payable should therefore be carefully considered in order to determine whether the relevant amount represents a royalty. It also include payments made for the use or right to use industrial, commercial, or scientific equipment (i.e. rentals).

Treaty relief may be available.

Services

Any Namibian resident paying a management or consultancy fee to a non-resident must withhold tax at 10%.

Management and consulting fees are specifically defined as: "any amount payable for administrative, managerial, technical, or consultative services or any similar services, whether such services are of a professional nature or not".

A branch is specifically included in the definition of a resident.

The rate is subject to DTA relief, where applicable.

Fees paid to non-resident directors and foreign entertainers are subject to WHT of 25%. No treaty relief is available.

Summary of WHT payable

The WHT rates and treaty relief for Namibian DTAs can be summarised as follows. Note that the tax treaties contain certain requirements that should be met before the reduced tax rate may be applied.

The definitions of dividends, interest, and royalties in the various treaties should also be considered.

Recipient WHT (%)
Dividends Interest Royalties Management, administrative, technical, and consulting fees Directors fees
Non-treaty 10/20 (1) 10 (2) 10 10 25
Treaty:          
Botswana 10 10 10 10 (7) 25
France 5/15 (3) 10 10 0 25
Germany 10/15 (3) 0 10 0 25
India 10 10 10 10 25
Malaysia 5/10 (1) 10 5 5 25
Mauritius 5/10 (1) 10 5 0 25
Romania 10 to 15 (4) 10 5 0 25
Russian Federation 5/10 (5) 10 5 0 25
South Africa 5/15 (1) 10 10 0 25
Sweden 5/15 (3) 10 5 10 (7) 25
United Kingdom 5/10/15 (6) N/A 5 0 25

Notes

  1. Lower rate applies where at least 25% of shares are held in the Namibian company. Higher rate applies otherwise.
  2. Namibian companies are taxed at the corporate tax rate on interest received.
  3. Lower rate applies where at least 10% of shares are held in the Namibian company. Higher rate applies otherwise.
  4. Rate depends on shareholding.
  5. Lower rate applies where at least 25% of shares are held in the Namibian company and recipient directly invested at least 100,000 United States dollars (USD) in the equity capital of the company paying the dividend. Higher rate applies otherwise.
  6. 5% where at least 50% of shares are held in the Namibian company. 10% where at least 25% of shares are held in the Namibian company. 15% otherwise.
  7. Local rates are lower than the 15% rate per the treaty.

Mining royalties

The Minerals (Prospecting and Mining) Act levies a royalty on minerals won or mined by a licence holder in Namibia, based on the table below:

Group of minerals Market value of minerals levied as a royalty (%)
Rough diamonds 10
Rough emeralds, rubies, and sapphires 10
Unprocessed dimension stone 5
Gold, copper, zinc, and other base metals 3
Semi-precious stones 2
Nuclear fuel minerals 3
Industrial minerals 2
Non-nuclear fuel minerals 2
Oil and gas 5

Source: www.chamberofmines.org.na/index.php/mining-tax-regime