Namibia, Republic of

Corporate - Income determination

Last reviewed - 08 June 2020

Inventory valuation

Inventory is valued at cost for tax purposes in Namibia.

The last in first out (LIFO) basis of valuation is only accepted if:

  • written consent was obtained from the Minister of Finance before such taxpayer renders one's income tax return for the first year of assessment for which the LIFO basis was adopted by the taxpayer, and
  • various conditions are met by the taxpayer as determined by the Minister of Finance.

Capital gains

Other than profits on the sale of mining and petroleum licences/rights, and the transfer of any share/interest (whether directly or indirectly) in a company owning a mineral/petroleum licence or right, capital gains are not taxed in Namibia.

Mining and Petroleum licences/rights

The sale, donation, expropriation, cession, grant, or any other alienation or transfer of ownership of any share or member's interest in a company that holds a mineral or petroleum licence/right, whether directly or indirectly, is included in the definition of gross income. The definition also specifically includes a sale of shares in a company for a licence or right to mine minerals or oil and gas in Namibia.

Dividend income

Dividends received are exempt from tax. Non-resident shareholders tax (NRST) should be withheld on dividends declared to non-resident shareholders. For more information on NRST, see the Withholding taxes section.

Interest income

Namibian companies are taxed on interest received from a Namibian source. Persons other than Namibian companies are subject to a final WHT on interest from banks and unit trusts. Interest paid to non-residents is subject to WHT on interest. For more information, see the Withholding taxes section.

Partnership income

The relevant partners of a partnership are regarded as the responsible taxpayers and not the partnership itself.

In practice, the assessment of a partnership is treated like that of a private business. The partnership is first treated as a business entity on its own in terms of income and expenditure. The profit or loss at the end of the year is then allocated to the individual partners. If they derived a profit from the partnership, it is added to their other non-partnership income; or if the partnership made a loss, the partners have the right to deduct it from their non-partnership income.

Rental income

Companies are taxed on rental income received from a Namibian source.

Royalty income

Companies are taxed on royalty income received from a Namibian source.

Foreign income

Corporate tax in Namibia is determined on the source basis; consequently, only income from a Namibian source or deemed Namibian source is subject to corporate tax.