2015 Income Tax and Value Added Tax Amendments

The Value-Added Tax Amendment Act 12 of 2015 as well as the Income Tax Amendment Act 13 of 2015 were promulgated in the Government Gazette on 29 December 2015 and 30 December 2015 respectively.

  • The amendments on the VAT Act became effective 1 January 2016.
  • The amendments on the Income Tax act became effective 30 December 2015.
  • The reduction in the corporate tax rate to 32% for companies and close corporations is effective for years of assessment commencing on or after 1 January 2015.
  • Liabilities of shareholders, owners and members of a close corporation for unpaid tax, including VAT
  • Shareholders of companies and members of close corporations will in future be jointly and severally liable for any tax or Value Added Tax debt to the extent that the debt arose whilst the person was a shareholder or a member of the said company or close corporation.


Value Added Tax Amendments

  • Increase in VAT registration threshold
    • The compulsory VAT registration threshold increased from N$ 200 000 to N$ 500 000.
    • The voluntary VAT registration threshold increased to N$ 200 000.
  • A person that applies for voluntary VAT registration will have to adhere to a six month VAT period unless, upon written application in good cause, the Commissioner of Inland Revenue has granted a two month period.
  • Import VAT administration
    • The Commissioner of Inland Revenue may require an importer on an ad hoc basis to make a security payment prior to goods being imported.
    • The Commissioner of Inland Revenue has the authority to deregister an import VAT account in certain circumstances.
  • Financial services rendered to a non-resident person
    • Financial services rendered to a non-resident who is outside Namibia at the time the service are supplied will be an exempt supply.
Income Tax Amendments
  • Reduction in corporate tax rateThe corporate tax rate for companies (other than mining and manufacturing companies) is reduced from 33% to 32% for years commencing on or after 1 January 2015.

  • PAYE on directors and members remuneration
  • PAYE will need to be withheld on payments made to any director.
  • Restraint of Trade
    • Restraint of trade payments received will now be included in Gross Income and the corresponding expense would be allowed as a deduction in calculating taxable income.
  • Sale of mineral or petroleum rights / licences
    • The sale or any alienation or transfer of any interest (directly or indirectly) in a company which holds a mineral or petroleum right or licence are now subject to tax.
    • The acquisition costs of such a right or license may now be deducted from the proceeds of such a sale or transfer.
  • Withholding tax on services
    • The withholding tax rate on services to a non - resident is reduced from 25% to 10%.
  • Withholding tax on royalties
    • The withholding tax rate in respect of royalties paid to a non - resident will be fixed at 10%.
  • Royalty payments now include payment for the right to use industrial, commercial or scientific
  • equipment.
    • he due date for remittance to Inland Revenue is 20 days after the end of the month during which the said liability is incurred or the said payment is made.
  • Withholding tax on interest
    • Interest payments to non-residents are now subject to withholding tax at a rate of 10%.
    • The withholding tax is due by the 20th day of the subsequent month in which the interest is paid.
    • Withholding tax on dividends ( Non-residents shareholders’ tax)
    • The due date for payment of non-resident shareholders’ tax on dividends has been changed to 20 days following the month the tax has been withheld from the dividend payment.
  • Inclusion of a definition of Namibia
    • The definition of Namibia for income tax purposes includes the territorial sea as well as the exclusive economic zone.
  • Recovering of taxes
    • Certain changes were affected in order to empower the Commissioner of Inland Revenue in
    • collecting overdue taxes. The most significant of these is that payments will first be allocated to outstanding tax, then penalties and finally interest.

 

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