My personal tax with BDO
TAX RATES APPLICABLETO INDIVIDUALS:
Individuals and Trusts (for years of assessment ending 28 February 2015)
There has been no change in the income tax rates for individuals and Trusts:-
The minimum tax threshold remains the same at N$50 000
The maximum marginal rate remains unchanged at 37% which applies to income above N$1 500 000 per year.
Non-resident Shareholders’ Tax applicable to individuals
There has been no change in these rates which are as follows:
The rate of withholding tax applicable to non resident individuals who are shareholders of Namibian companies is 20%.
Royalty Tax for Individuals
Royalty tax must be withheld from any royalty payments made by Namibian residents to non-resident persons for the use of patents, trademarks, designs, or for imparting scientific, technical, commercial or industrial knowledge at the rate of 9,6% with effect from years commencing on or after 1 January 2014.
Rates for residents of countries with Double Taxation Agreements with Namibia may be subject to rates of 5%.
Withholding Tax on Services
Payments by a Namibian resident to a non resident for the following services:- Directors’ fees, entertainment fees, management fees , technical fees, consulting fees and administrative fees remain unchanged at 25%.
The following are the rates applicable to residents of the following countries which have Double Taxation Agreements with Namibia:
Technical fees have a withholding tax for the following countries:
Botswana - 15%;
India - 10% and
Malaysia - 5%
The rate is 0% for the following countries: France; Germany; Mauritius; Romania; Russian Federation; South Africa; Sweden and the United Kingdom.
» FRINGE BENEFITS
Housing Loans
Tax is payable on low interest loans provided by employers to employees. The tax payable is based on the difference between the “official” rate and the rate of the low interest loan. On a loan of N$100 000 (with prime at 9,25%), the official rate is 12% and if the low interest loan is at 8% the employee would be taxed on an amount of N$4 000 (4% of N$100 000) for the year, or N$333,33 per month.
Housing Subsidy
Subsidies granted by employers to employees that are based on a payment to the employee of all or a part of the employees’ normal mortgage bond from a financial institution are taxable in full unless the employer has an approved housing scheme.
Free Housing
If an employer owns residential accommodation and makes this available to his employees, the benefit is taxable based on a table that varies according to the town and the size of the accommodation. For example:- the benefit on a house in Windhoek with 3 rooms is N$1 000 per month.
Approved Housing Schemes
Where an employer has an approved housing scheme the benefits received by employees on housing loans, housing subsidies and free housing are reduced by one third.
Meals
Meals supplied to employees on the premises of the employer such as in staff canteens are not taxable.
Loans (other than housing loans)
This taxable benefit is calculated the same way as housing loans. Loans to employees for study purposes are not taxable. Loans of less than N$3 000 per year are also not taxable.
Company motor vehicles
Company motor vehicles used by employees are taxed on an amount of 1,5% per month if all running costs are paid by the employer, on the cash cost of the vehicle including VAT, and at 1,4% per month if the employee bears the fuel costs.
Motor vehicle allowances
Where an employee uses his own car for business purposes and receives an allowance from his employer, the allowance less the costs incurred for business travel is taxable. The costs incurred include the following:- wear and tear allowance, finance charges and operating costs such as fuel, repairs, insurance, tyres and any other costs related to using the vehicle. The business use is calculated by taking the ratio of kilometres travelled for business purposes to the total kilometres travelled for the year.
Interest income
Interest received by individuals from Namibian Banks and Unit Trusts is taxed at 10% and this tax is deducted at source by the bank or unit trust and is a final tax.
Contributions to pension and other retirement funds
The maximum deduction to pension and other retirement funds including educational policies is N$ 40 000 per year.
Retirement, ill health or death
Lump sum payments from Namibian pension and other retirement funds on retirement, ill health or death are tax free. One third of the lump sum benefit from Provident funds is tax free. Annuities received from pension, retirement and provident funds are taxable at the ordinary tax rate applicable to the individual.
Withdrawal from pension and other retirement funds
In the cases where employees resign or are dismissed then the lump sum payout is taxable at the employee’s average tax rate subject to a minimum of 18% unless the lump sum is transferred to another pension or retirement fund, in which case it is exempt from tax.
Medical Aid
Contributions by employees to medical aid funds are not tax deductible.
Retrenchment and gratuities
On retrenchment the first N$300 000 paid to an employee is exempt from tax. In the case of special payments on retirement or ill health then the first N$300 000 is also exempt from tax.
Social Security
All employers and employees are required to pay Social Security contributions at the rate of 0,9% of basic earnings with a maximum of N$81 per month and a minimum of N$2,70 per month each.
Company profile: BDO
The founder member in Namibia established an office in Windhoek in 1950, with a staff of 7. BDO was founded in 1991 when this founding firm joined the BDO Network and became BDO Spencer Steward which is a member firm of the international network known today as BDO. In 1998 the current partners of BDO entered into a buy-out agreement with the founders and BDO Namibia was established.
The new partners realised the need to grow local roots and invested significantly in staff development, growing staff numbers from just 12 in 1998, to a staff complement of over 100 in 2013. To accommodate the growing staff numbers and to be more accessible to our clients, the firm moved to new offices in 2000 in the CBD of Windhoek. In 2003 an office was opened in Walvis Bay to service our coastal clients, who have increased in numbers yearly. In October 2007 we opened our offices in Oshakati to service our growing client base in the North of Namibia.
Our clients include public companies, state-owned enterprises, parastatals, municipalities and control boards, hospitals and donor funded projects. We perform audits on behalf of the Auditor General of Namibia and have done special projects for the Receiver of Revenue. Our expertise ranges from fishing and mining to agriculture, insurance and retail enterprises.
Through these assignments we have established a relationship with various government decision makers and successful local businessmen and businesswomen, enabling us to transfer specialist-consulting skills to our staff.
Today we are one of the leaders in the accounting profession in Namibia. We are also the largest provider of financial services in our market. Our 7 partners and over 100 staff members can provide our clients with a wide range of services around the country.
Individuals and Trusts (for years of assessment ending 28 February 2015)
There has been no change in the income tax rates for individuals and Trusts:-
The minimum tax threshold remains the same at N$50 000
The maximum marginal rate remains unchanged at 37% which applies to income above N$1 500 000 per year.
Non-resident Shareholders’ Tax applicable to individuals
There has been no change in these rates which are as follows:
The rate of withholding tax applicable to non resident individuals who are shareholders of Namibian companies is 20%.
Royalty Tax for Individuals
Royalty tax must be withheld from any royalty payments made by Namibian residents to non-resident persons for the use of patents, trademarks, designs, or for imparting scientific, technical, commercial or industrial knowledge at the rate of 9,6% with effect from years commencing on or after 1 January 2014.
Rates for residents of countries with Double Taxation Agreements with Namibia may be subject to rates of 5%.
Withholding Tax on Services
Payments by a Namibian resident to a non resident for the following services:- Directors’ fees, entertainment fees, management fees , technical fees, consulting fees and administrative fees remain unchanged at 25%.
The following are the rates applicable to residents of the following countries which have Double Taxation Agreements with Namibia:
Technical fees have a withholding tax for the following countries:
Botswana - 15%;
India - 10% and
Malaysia - 5%
The rate is 0% for the following countries: France; Germany; Mauritius; Romania; Russian Federation; South Africa; Sweden and the United Kingdom.
» FRINGE BENEFITS
Housing Loans
Tax is payable on low interest loans provided by employers to employees. The tax payable is based on the difference between the “official” rate and the rate of the low interest loan. On a loan of N$100 000 (with prime at 9,25%), the official rate is 12% and if the low interest loan is at 8% the employee would be taxed on an amount of N$4 000 (4% of N$100 000) for the year, or N$333,33 per month.
Housing Subsidy
Subsidies granted by employers to employees that are based on a payment to the employee of all or a part of the employees’ normal mortgage bond from a financial institution are taxable in full unless the employer has an approved housing scheme.
Free Housing
If an employer owns residential accommodation and makes this available to his employees, the benefit is taxable based on a table that varies according to the town and the size of the accommodation. For example:- the benefit on a house in Windhoek with 3 rooms is N$1 000 per month.
Approved Housing Schemes
Where an employer has an approved housing scheme the benefits received by employees on housing loans, housing subsidies and free housing are reduced by one third.
Meals
Meals supplied to employees on the premises of the employer such as in staff canteens are not taxable.
Loans (other than housing loans)
This taxable benefit is calculated the same way as housing loans. Loans to employees for study purposes are not taxable. Loans of less than N$3 000 per year are also not taxable.
Company motor vehicles
Company motor vehicles used by employees are taxed on an amount of 1,5% per month if all running costs are paid by the employer, on the cash cost of the vehicle including VAT, and at 1,4% per month if the employee bears the fuel costs.
Motor vehicle allowances
Where an employee uses his own car for business purposes and receives an allowance from his employer, the allowance less the costs incurred for business travel is taxable. The costs incurred include the following:- wear and tear allowance, finance charges and operating costs such as fuel, repairs, insurance, tyres and any other costs related to using the vehicle. The business use is calculated by taking the ratio of kilometres travelled for business purposes to the total kilometres travelled for the year.
Interest income
Interest received by individuals from Namibian Banks and Unit Trusts is taxed at 10% and this tax is deducted at source by the bank or unit trust and is a final tax.
Contributions to pension and other retirement funds
The maximum deduction to pension and other retirement funds including educational policies is N$ 40 000 per year.
Retirement, ill health or death
Lump sum payments from Namibian pension and other retirement funds on retirement, ill health or death are tax free. One third of the lump sum benefit from Provident funds is tax free. Annuities received from pension, retirement and provident funds are taxable at the ordinary tax rate applicable to the individual.
Withdrawal from pension and other retirement funds
In the cases where employees resign or are dismissed then the lump sum payout is taxable at the employee’s average tax rate subject to a minimum of 18% unless the lump sum is transferred to another pension or retirement fund, in which case it is exempt from tax.
Medical Aid
Contributions by employees to medical aid funds are not tax deductible.
Retrenchment and gratuities
On retrenchment the first N$300 000 paid to an employee is exempt from tax. In the case of special payments on retirement or ill health then the first N$300 000 is also exempt from tax.
Social Security
All employers and employees are required to pay Social Security contributions at the rate of 0,9% of basic earnings with a maximum of N$81 per month and a minimum of N$2,70 per month each.
Company profile: BDO
The founder member in Namibia established an office in Windhoek in 1950, with a staff of 7. BDO was founded in 1991 when this founding firm joined the BDO Network and became BDO Spencer Steward which is a member firm of the international network known today as BDO. In 1998 the current partners of BDO entered into a buy-out agreement with the founders and BDO Namibia was established.
The new partners realised the need to grow local roots and invested significantly in staff development, growing staff numbers from just 12 in 1998, to a staff complement of over 100 in 2013. To accommodate the growing staff numbers and to be more accessible to our clients, the firm moved to new offices in 2000 in the CBD of Windhoek. In 2003 an office was opened in Walvis Bay to service our coastal clients, who have increased in numbers yearly. In October 2007 we opened our offices in Oshakati to service our growing client base in the North of Namibia.
Our clients include public companies, state-owned enterprises, parastatals, municipalities and control boards, hospitals and donor funded projects. We perform audits on behalf of the Auditor General of Namibia and have done special projects for the Receiver of Revenue. Our expertise ranges from fishing and mining to agriculture, insurance and retail enterprises.
Through these assignments we have established a relationship with various government decision makers and successful local businessmen and businesswomen, enabling us to transfer specialist-consulting skills to our staff.
Today we are one of the leaders in the accounting profession in Namibia. We are also the largest provider of financial services in our market. Our 7 partners and over 100 staff members can provide our clients with a wide range of services around the country.
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