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Calculation of Taxable Income: Withholding Taxes

Namibia has a source-based tax system where income from within Namibia is subject to tax, unless exempt. Foreign companies earning income within Namibia must register a local entity/branch if they have a place of business in Namibia. If Namibia has a double tax agreement with the foreign company's country, the company is only taxable in Namibia if it has a permanent establishment. Non-residents without a place of business may be subject to withholding taxes. Taxable income is calculated as gross income less exemptions/deductions and is taxed at the corporate tax rate.

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142 views

Calculation of Taxable Income: Withholding Taxes

Namibia has a source-based tax system where income from within Namibia is subject to tax, unless exempt. Foreign companies earning income within Namibia must register a local entity/branch if they have a place of business in Namibia. If Namibia has a double tax agreement with the foreign company's country, the company is only taxable in Namibia if it has a permanent establishment. Non-residents without a place of business may be subject to withholding taxes. Taxable income is calculated as gross income less exemptions/deductions and is taxed at the corporate tax rate.

Uploaded by

Kuveri Kvr Tjiraso
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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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 WHTs. See
the Withholding taxes section for more information.

Calculation of taxable 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
Gross income
a capital nature (provisions for specific inclusions in gross income and
amounts deemed to be from a Namibian source exist).

The Income Tax Act provides for certain amounts to be specifically exempt
Less: Exemptions
from tax.

Equals: Income

Expenditures and losses actually incurred to generate income may be


Less: Deductions
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 Taxable income is taxed at the corporate tax rate as set out under the tax rate
income section below.

Tax rates
The corporate tax rates are summarised below:
2016/17
Entity tax rate
(%)

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