Income Tax for Individuals Dividend exemptions Employees’ Tax (PAYE)  Local and foreign dividends are exempt in the PAYE must be deducted at source on a monthly Namibia has a source based system of taxation with hands of Namibian residents; and basis by the employer. The tax threshold is annual the result that Namibian residents are, save for some  Interest earned from unit trusts is no longer taxable income of N$ 40 000. PAYE is not required exceptions, only taxed on their Namibian income deemed to be dividends and is subject to a final to be deducted from genuine allowances granted to while foreign residents are taxed only on the income 10% withholding tax, except if payable to employees to defray business expenditure. generated within Namibia. Namibian companies and entities normally The tax rates, exemptions and deductions set out exempt from tax e.g. pension funds. below are the latest and are effective from years of Travel Allowance assessment commencing 1 March 2009. Deductions Expenditure incurred for business purposes may be deducted from the allowance. The capital cost of the A deduction, limited to N$40 000 per annum for vehicle may be claimed over 3 years. Business Tax Rates aggregated contributions to pension, provident and expenditure is calculated in the ratio of business retirement annuity funds and contributions towards Namibian kilometres over total kilometres. A detailed logbook Natural Persons tertiary education policies. must be kept. Quick Tax Taxable Income Rates of Tax No deduction is granted for personal medical expenses or medical aid contributions. N$ 0 - N$ 40 000 Not taxable Social Security Contributions Guide N$ 40 001 - N$ 80 000 N$ 0 + 27% Donations The employer and employee must each make Social N$ 80 001 - N$ 200 000 N$ 10 800 + 32% Security contributions at the rate of 0.9% of the Donations to registered welfare organisations or employee’s basic salary (maximum N$54 per N$ 200 001 - N$ 750 000 N$ 49 200 + 34% approved educational institutions are deductible month). January 2011 Over N$ 750 000 N$ 236 200 + 37% provided that:  An individual is not nominated as the beneficiary; Valuation of Certain Other Fringe Exemptions  A certificate is obtained from the institution or Benefits Interest exemptions (for persons other than a organisation; company)  Compulsory school fees are not allowed as a Company Car Fringe Benefit deduction; and  Government stock or securities, including Taxable value of the fringe benefit is 1.5% per month Treasury Bills Unlimited;  The deduction does not create or increase an of the cost price of the vehicle. If the employee assessed loss. bears the fuel costs, the taxable value is reduced to  Post Office Savings interest Unlimited; and 1.4% per month. 1  Foreign interest Unlimited. Taxation of Married Persons Free or Subsidised Services 2019 version is avaliable on the below link: Husbands and wives are taxed separately. https://www2.deloitte.com/na/en/pages/tax/ The taxable value of the fringe benefit is the cost to articles/Deloitte-Namibia-Key-Fiscal- 1 Provided that acquisition is funded from non-Namibian the employer of providing the service less the Guide-2019.html capital or investment, relates to a foreign business and the consideration paid by the employee. interest is taxed in the foreign country. Housing and other Soft Loans Farmers Any property acquired by natural persons  Sunflower cooking oil; including mineral rights (except the category  Animal fat used for preparation of food;  The taxable value is the difference between the Farmers are taxed in the same manner as immediately below):  Bread flour, cake flour and bread; interest payable on the loan by the employee individuals or companies with the exception of Value Rates of duty  Fresh milk; and and the official rate of interest (currently 12%). certain provisions regarding capital expenditure.  White and brown sugar.  Exempt loans: Certain capital expenditure may be deducted in full in N$ 0 – N$ 400 000 0% the year in which the expenditure is incurred, limited - Casual loans not exceeding N$3 000 in N$ 400 001 - N$ 800 000 N$ nil + 1% With effective from 1 May 2010 medical, dental and to the farming taxable income for the year. This aggregate; paramedical services; services and rooms supplied includes a deduction of capital expenditure relating N$ 800 001 - N$ 1 500 000 N$ 4 000 + 5% - Study loans granted to an employee for own by a registered hospital; maternity home; nursing to power supply from 1 March 2007 for individual Over N$ 1 500 000 N$ 39 000 + 8% studies; and home; convalescent home; hospice and clinic; and taxpayers and from 1 January 2007 for taxpayers - Approved housing scheme loans or funeral undertaking services are zero-rated. other than individuals. Any excess farming capital subsidies: Generally one third of the taxable Agricultural land acquired by natural persons expenditure can be carried forward to the next year benefit is exempt. and financed by Agricultural Bank of Namibia: of assessment. Value Rates of duty Stamp Duty

Meals N$ 0 - N$ 500 000 0% Stamp duty is payable at 0.2% on the issue or transfer of shares. Shares listed on the Namibian The taxable value of meal coupons and free or Taxation of Trusts N$ 500 001 - N$ 1 000 000 N$ nil + 1% Stock Exchange are exempt from this duty. Stamp subsidised meals, if used and received at the Over N$ 1 000 000 N$ 5 000 + 3% Duty is also imposed on the acquisition of immovable residence, is N$ 100 per month for every family A trust is taxed as a person (see tax rate table for property and a range of other instruments. member of 6 years and older. Meals provided at individuals). Income earned by a vesting trust and Any property, including mineral rights, acquired business premises are exempt. certain distributions made by a discretionary trust are taxed in the hands of the beneficiary. by persons other than natural persons, including trusts Withholding Taxes Residential Accommodation  12% of the value of the property Non-residents An employee provided with residential Donations Tax, Estate Duty, Capital In determining the value for transfer duty purposes, accommodation owned by his employer is taxed Gains Tax VAT, where applicable, is excluded. Certain payments to non-residents are subject to according to the following table: withholding taxes as shown below: There is currently no donations tax, estate duty or The sale of shares/ membership interest in property Rooms / Monthly Taxable Benefit Dividends2 10% capital gains tax in Namibia. Certain capital gains are owning companies/ close corporations are currently 1 2 3 4 5 6 7 8 8+ not subject to transfer duties. Royalties 10.2% Location N$ N$ N$ N$ N$ N$ N$ N$ N$ taxed as normal income. Interest 3 10% Windhoek 500 750 1000 1400 1800 2200 2800 3400 4000 Walvis Bay Swakopmund 350 550 750 1000 1300 1700 2100 2550 3000 Value-Added Tax (VAT) Other Transfer Duty

Municipal VAT is imposed on the supply and import of most 250 375 500 700 900 1100 1400 1700 2000 Areas Transfer duty is levied on the value of any property goods and services at a rate of 15%. Qualifying 2 Certain dividends declared to foreign-held Namibian holding Other Towns 125 175 250 350 450 550 700 850 1000 acquired. The rates below are effective from exports and certain other supplies may be zero- companies are subject to non-resident shareholder’s tax 1 March 2010 rated, including the following foodstuffs: (NRST). 3  Mahango, mahango meal and maize meal; Namibian registered Banks and Unit Trust Management Generally one third of the taxable benefit is exempt if Companies must withhold a final tax on interest of 10% as the employer has an approved housing scheme.  Fresh and dried beans (excl. canned or frozen from 1 March 2009. beans); Residents Capital Allowances for Businesses Exporters of manufactured goods Land Tax 7 Namibian registered Banks and Unit Trust  Moveable assets used for trade purposes 33 ⅓% Reduction in taxable income 80% Land tax is payable for every 12 month period Management companies must withhold 10% on  Buildings used for trade purposes (On cost ending 28 February at the following rates (applied to interest that accrues to an individual, a trust or the 7 the unimproved site value): estate of a deceased person. Excluded are Namibian of erection) From the export of manufactured goods (excluding - in year brought into use 20% fish/meat products) Namibian resident owner 0.75% companies and entities that are normally exempt from tax, e.g. pension funds. Effective from 1 March - subsequent 20 years 4% Non-resident owner 1.75% 2009.  Certain farming capital expenditure 100% Export Processing Zones (EPZ) On each additional farm the rate increases (Limited to farming taxable income) 6 EPZ status confers total exemption from income tax, by 0.25%  Intellectual property Period of use VAT, customs and excise duty, stamp and transfer Corporate Taxes  Lease premiums Period of lease 6 duty, but not PAYE and withholding taxes. Essential 6 Corporate income tax rates  Leasehold improvements Period of lease requirements include conducting a manufacturing Environmental Tax activity and exporting all goods outside the Southern No environmental tax has yet been introduced in  Basic Rate 4 34% 6 African Customs Union. Maximum 25 years Namibia, although the Minister of Finance  Registered manufacturers 5 18% announced in 2010 that the legislation is in the 5 process of being finalised.  Mining (other than diamond/petroleum) 37.5% Incentives Exchange Controls  Diamond mining – effective rate 5 55% Manufacturers The Namibian Dollar is linked to the South African  Petroleum mining 35% Contact Details Rand (N$1=ZAR1). Namibia is a member of the Registered manufacturers qualify for the following:  Branches of foreign companies 34% Common Monetary Area (with South Africa, Lesotho Gerda Brand Tel +264 61 285 5062  Retirement funds Exempt  18% Tax rate for a limited period of time (max. 10 and Swaziland). The Common Monetary Area is currently subject to a system of exchange controls, Nikia Bauernschmitt Tel +264 61 285 5059 years from initial registration); 4 administered in Namibia by the Bank of Namibia. Rate is effective for years of assessment commencing on  Buildings: The normal 4% annual allowance is Queries: [email protected] or after 1 January 2009. 5 increased to 8% (applies for 10 years); and Mining companies and manufacturing companies pay tax on Please also see: www.deloitte.com/na non-mining/ non-manufacturing income at 34%.  An additional 25% deduction for: Transfer Pricing Deloitte & Touche, Deloitte Building, Maerua Mall Complex, - certain export marketing expenses; Transfer pricing legislation requires an arm’s length Jan Jonker Road, Windhoek, Namibia. - approved training costs; consideration to be charged for cross border goods Annual Duty on Share Capital - remuneration of manufacturing employees; or services transactions between connected © Copyright Deloitte & Touche – January 2011 (Updated for 2010 Income Tax Amendment Act, 2010 VAT and persons. Annual duty N$4 per N$10 000 - Certain land-based transportation costs Amendment Act, Transfer Duty Amendment Act 2010, (applies for 10 years). Transfer Duty Second Amendment Act and the 2010/2011 (Minimum N$80) Budget speech). Thin Capitalisation Levied on a company’s issued share capital plus This quick tax guide is designed as a quick reference and is not share premium and certain undistributed reserves. Thin capitalisation requires foreign held Namibian intended to be a comprehensive statement of the law. It should not In the case of a branch, the duty is levied on the companies to be adequately capitalised. Interest be relied upon as a substitute for specific advice in considering the capital of the foreign parent company. charged on excessive debt is not tax deductible. tax effects of particular transactions. No liability is accepted for errors or opinions contained herein.