Namibia, Republic of
Namibia has a source-based tax system, which means that income from a source within Namibia or deemed to be within Namibia will be subject to tax in Namibia, unless a specific exemption is available.
Income earned by foreign companies from a source within or deemed to be within Namibia will be subject to tax in Namibia. In such cases, the foreign entity must determine whether it is obligated to register a local entity or branch. A foreign company is required to register a local company (local subsidiary) or an external company (branch) if it has established a place of business in Namibia.
In the event that Namibia has entered into a double tax agreement (DTA) with the country where the foreign company resides, such entity will only be taxable in Namibia if it has established a permanent establishment (PE) in Namibia. If a PE exists, only the portion of income attributable to the PE will be subject to tax in Namibia.
Non-residents who do not have a place of business in Namibia may, however, be subject to withholding taxes (WHTs). See the Withholding taxes section for more information.
Calculation of taxable income
|Gross income||The total amount, in cash or otherwise, received by or accrued to any person from a source within, or deemed to be within, Namibia, excluding receipts of a capital nature (provisions for specific inclusions in gross income and amounts deemed to be from a Namibian source exist).|
|Less: Exemptions||The Income Tax Act provides for certain amounts to be specifically exempt from tax.|
|Less: Deductions||Expenditures and losses actually incurred to generate income may be deducted, provided that these expenses are not of a capital nature.|
|The Income Tax Act specifically provides for certain expenditures to be deductible and allows a deduction for capital allowances.|
|Only expenses incurred to generate ‘income’ may be deducted. Expenses incurred to generate income exempt from tax are not deductible. Apportionment should be considered when expenses are incurred to generate both income and exempt income.|
|Equals: Taxable income||Taxable income is taxed at the corporate tax rate as set out under the Tax rates section below.|
The corporate tax rates are summarised below:
|Entity||2017/18 tax rate (%)|
|Domestic companies and close corporations (excluding entities mentioned below)||32|
|Branches of foreign companies||32|
|Registered manufacturers (only applicable for the first ten years of registration)||18|
|Diamond mining companies and companies that render services to such companies in connection with diamond mining||55|
|Mining companies (other than diamond mining companies) and companies that render services to such companies in connection with mining||37.5|
|Long-term insurers (the rate is applied to gross investment income)||12.8|
|Petroleum income tax rate||35|
Local income taxes
Namibia does not levy income taxes at the local, state, or provincial levels.