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Namibian VAT and Income Tax Amendment Acts
Namibian VAT and Income Tax Amendment Acts
The Income Tax Amendment Act No 13 of 2015 and the Value-Added Tax Amendment Act No 12 of 2015 were published in the Government Gazette on 30 December 2015 and 29 December 2015, respectively.
We set out a summary of the amendments below:
Income tax
- Amend the “gross income” definition with regard to specific inclusions of restraint of trade payments and the sale of petroleum licences or rights
- Provide for a definition of “Namibia”
- Provide for an allowance to be claimed in respect of “restraint of trade” payments made
- Withholding tax on royalties:- Amend the withholding tax on royalties rate to 10% - Expand the scope of the withholding tax on royalties to include the right of use of industrial, commercial or scientific equipment- Introduce penalty and interest implications on late payments.
- Withholding tax on services:- Amend the withholding tax on services rate to 10%- Amend the definition of a “resident person” to include a branch
- Withholding tax on foreign interest:- Introduce withholding tax on interest paid to non-residents at a rate of 10%- Introduce penalty and interest implications on late payments.
- Non-resident shareholders’ tax:- Amend the due date for payments- Introduce penalty and interest implications on late payments.
- Provide for the allocation of tax payments.
- Introduce certain recovery provisions.
- Reduce the non-mining corporate tax rate to 32% for years of assessment commencing on or after 1 January 2015.
- Introduce provisions relating to electronic communication.
- Amendment to the definition of “remuneration” as it relates to directors of private companies and public companies.
All income tax amendments, except for the reduction in the corporate tax rate, are effective from 30 December 2015.
VAT
- Provide for the requirement of security for the importation of goods on a VAT import account.
- Empower the Commissioner to prescribe the criteria for the eligibility of VAT import accounts; and allow authority to cancel VAT import accounts
- Increase the VAT threshold to N$500 000; and prescribe 6 month VAT periods for voluntary registrations.
- Set a threshold at N$200 000 for voluntary VAT registration.
- Provide for liability of shareholders for tax debts.
- Introduce recovery provisions related to shareholders of companies or members of close corporations.
- Impose criminal penalties for the misuse of VAT import account numbers.
- Provide for rules for electronic communication.
All VAT amendments are effective as from 1 December 2015.
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