How to Calculate Income Tax in Namibia

What is an income tax?

An income tax is a tax imposed on individuals or entities in respect of the income or profits earned by them. Income tax generally is computed as the product of a tax rate times the taxable income. Taxation rates may vary by type or characteristics of the taxpayer and the type of income.

Where and how to calculate an income tax in Namibia

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. Mostly in Namibia, the straight forward way to calculate efficient tax rate is to divide the income tax expenses by the income earned before taxes.

Frequently Asked Questions

How much should you earn to pay tax in Namibia?

A salary earning individual who earns an income of more than N$ 40 000 per annum and non-salary income in excess of N$ 5 000 per month is liable to pay tax and should register for income tax.

How do I calculate my gross income tax in Namibia?

Your Adjusted Gross Income (AGI) is then calculated by subtracting the adjustments from your total income. Your AGI is the next step in figuring out your taxable income. You then subtract certain deductions from your AGI. The resulting amount is taxable income on which your taxes are calculated.

How do I claim tax back in Namibia?

• The words “Tax Invoice”
• The seller’s name and address.
• The seller’s VAT registration number.
• Your name.
• The date of issue of the tax invoice.
• A tax invoice number.
• A full description of the goods purchased.
• The cost of goods excluding 15% VAT.

Is foreign income taxable in Namibia?

Namibia has a source based system of taxation with the result that Namibian residents are, save for some exceptions, only taxed on their Namibian income while foreign residents are taxed only on the income generated within Namibia.

What is the VAT rate in Namibia?

VAT is levied at the standard rate of 15% on the supply of most goods and services and on the importation of goods. It is mandatory for a person who carries on a business with an annual taxable turnover above N$500,000 to apply for VAT registration.

Is a bonus taxable in Namibia?

Typical items of an expatriate compensation package set out below are fully taxable: Basic salaries, wages, leave pay, and bonuses.

How is income calculated?

How to calculate annual income. To calculate an annual salary, multiply the gross pay (before tax deductions) by the number of pay periods per year. For example, if an employee earns $1,500 per week, the individual’s annual income would be 1,500 x 52 = $78,000.

Is housing allowance taxable in Namibia?

Housing allowance is taxable, however 1/3 is exempt if the employer has an approved housing scheme; The use of a company car is taxable at 1.5% if all costs are paid by the employer and 1.4% if you as an employee pays the fuel cost.

How does Namibia tax work?

Namibia has a source based system of taxation with the result that Namibian residents are, save for some exceptions, only taxed on their Namibian income while foreign residents are taxed only on the income generated within Namibia.

How does VAT work in Namibia?

The standard rate of VAT is 15% and certain specified supplies of goods and services may be zero-rated. Where a registered person exports goods from Namibia, the sale will be subject to 0% VAT. Import VAT is applicable and payable (at an effective rate of 16.5%) on all goods (movable items) imported into Namibia.

How do I register for tax in Namibia?

To register, you need to complete a registration form, and have a copy of your identification document (ID, passport or birth certificate) to submit with the form. Step 2: Click here to download the taxpayer registration form. Now continue to complete the form.

Is rental income taxable in Namibia?

Premises, land, building, house, backyard flat, and office space. Income received from any agreement for the usage of the property is taxable, provided that such a property is situated in Namibia. Money paid to terminate the rental agreement is also taxable and should be included in the income for the year.

Does Namibia have capital gains tax in Namibia?

Namibia has no capital gains tax, estate duty, inheritance tax or donation tax. Partnerships are not treated as separate taxable entities and partners are taxed on their share of net partnership income.

What is a tax certificate in Namibia?

A Good Standing Certificate is issued by Inland Revenue Department to confirm that a taxpayer is compliant with the Namibian tax laws in terms of submission of tax returns and payment of taxes.

When must you register for VAT in Namibia?

A registered person must submit a VAT return on or before 25th day of the month following the end of the period.

Do you charge VAT on exports to Namibia?

Value-Added Tax. 874. VAT on exports to Namibia. Namibian VAT is payable upon importation into Namibia at either 15% or 30%, depending on the nature of the goods.

Is there VAT in Namibia?

VAT is payable on all imports for home consumption in Namibia, subject to certain exemptions (e.g. in terms of a technical assistance agreement, donations to the state, goods of which the local supply is zero-rated). Import VAT is payable on the greater of the free on board (FOB) value plus 10% or the market value.