How to Calculate VAT in Namibia

What is VAT?

A value-added tax, known in some countries as a goods and services tax, is a type of tax that is assessed incrementally. It is levied on the price of a product or service at each stage of production, distribution, or sale to the end consumer.

Where and how to calculate VAT in Namibia

This is the simple way to calculate VAT in Namibia;

• Solution : GST % = 15. Amount = 25000.
• Step 1 : GST Price = (25000 * 15 ) / 100. = 3750 $
• Step 2 : Net Price = 25000 + 3750. = 28750 $ Hence the VAT Price is 3750 $ and Net Price is 28750 $

Frequently Asked Questions

What is VAT explain?

VAT or Value Added Tax is a type of tax that is charged by the Central Government on the sale of services and goods to the consumers. VAT is paid by the producers of services and goods, but it is finally imposed on the consumers who purchase the services and goods when they pay for it.

What is the VAT tax in Namibia?

A value-added tax (VAT) is a consumption tax placed on a product whenever value is added at each stage of the supply chain, from production to the point of sale. The amount of VAT that the user pays is on the cost of the product, less any of the costs of materials used in the product that have already been taxed.

Why is VAT used in Namibia?

VAT is a form of consumption tax – that is a tax applied to purchases of goods or services and other ‘taxable supplies’. For a business, VAT plays an important role and can be charged on a range of your goods and services. Charities will have different rules governing their VAT.

What are the three types of VAT in Namibia?

VAT: The difference between standard-rated, zero-rated and exempt supplies. There are three categories of supplies that can be made by a VAT vendor: standard-rated, zero-rated and exempt supplies.

How is VAT calculated in Namibia?

To calculate VAT having the gross amount you should divide the gross amount by 1 + VAT percentage. (i.e if it is 20%, then you should divide by 1.20), then subtract the gross amount.

How do you avoid VAT in Namibia?

If you happen to offer a variety of products or services which are distinctly different, you may be able to avoid passing the VAT threshold by chopping up your business into smaller businesses that handle one product or service each. Your annual revenue is now split up between these separate businesses.

Do I need to pay VAT in Namibia?

You must account for VAT on the full value of what you sell, even if you: receive goods or services instead of money (for example if you take something in part-exchange) haven’t charged any VAT to the customer – whatever price you charge is treated as including VAT.

How do you add VAT in Namibia?

If you want to add VAT to the price, to divide the amount by 100 and then multiply by (100 + VAT percentage). That’s all, you got the amount including VAT (Gross).

How do you use VAT in Namibia?

VAT is commonly expressed as a percentage of the total cost. For example, if a product costs $100 and there is a 15% VAT, the consumer pays $115 to the merchant. The merchant keeps $100 and remits $15 to the government.

What is VAT and why is it important in Namibia?

Value-added tax (VAT) is a type of indirect tax levied on goods and services for value added at every point of production or distribution cycle, starting from raw materials and going all the way to the final retail purchase. VAT was introduced on April 1, 2005.

How much VAT can you claim back in Namibia?

You can reclaim 50% of the VAT on the purchase price and the service plan. You work from home and your office takes up 20% of the floor space in your house.

Is VAT paid on gross or net in Namibia?

We calculate the VAT as a percentage of the net figure and then add it onto the net amount to arrive at the gross.

Is VAT charged on VAT illegal in Namibia?

In general VAT must always be charged but you must not charge VAT on top of VAT. You should check the VAT applied to your billed expenses: If the expense originally was zero rated or exempt: ensure that VAT is applied to the expense on your invoice as you must charge VAT on that expense.

What are the benefits of being VAT registered in Namibia?

VAT registered businesses add VAT to their sales invoices and can reclaim any VAT included in the items they have bought. If you are not VAT registered you still have to pay the VAT on your purchases but are unable to reclaim it.

Who pays value added tax in Namibia?

VAT is assessed and collected on the value of goods or services that have been provided every time there is a transaction (sale/purchase). The seller charges VAT to the buyer, and the seller pays this VAT to the government.