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Companies and Close Corporations Tax in Namibia: Everything You Need to Know
This article provides a comprehensive guide to understanding the Companies and Close Corporations tax in Namibia, tax obligations, deductable expenses, and other important information. Companies and close corporations are required to pay tax on the profits they earn. They are also required to submit annual financial statements.
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Tax Rates and Provisional Payments (Companies and Close Corporations Tax in Namibia)
- Companies that do not engage in mining activities are subject to a flat tax rate of 32%.
- Two provisional tax payments and returns must be made by companies each year:
- The first provisional tax payment and return are due within 6 months after the start of the financial year.
- The second provisional tax payment and return are due at the end of the financial year.
Public Officer Requirement (Companies and Close Corporations Tax in Namibia)
- A company conducting business in Namibia is required to appoint a Public Officer to represent it for tax affairs.
Deductable Expenses (Companies and Close Corporations Tax in Namibia)
- Expenditure (excluding capital expenditure) incurred to produce income.
- Expenditure on repairs made to the place of business.
- One-third (for three years) of the cost of capital expenditure, such as vehicles and machinery. However, no deduction is allowed if the item is sold.
- A deductible allowance of 20% of the cost of erecting a building in the year it was brought into use, and 4% for each of the following 20 years.
For a full list of general deductions, refer to section 17 of the Income Tax Act.
Expenditure Not Subject to Deduction (Companies and Close Corporations Tax in Namibia)
Certain expenses are not allowed as deductions from income, including:
- Domestic or private expenses, including house repairs.
- Expenses not related to the production of income.
- Amount paid in respect of land tax.
- Loss or expense that is recoverable from an insurance contract.
For a full list of expenses not allowed, refer to section 24 of the Income Tax Act.
Withholding Tax Obligations
Companies paying dividends to non-resident shareholders, paying interest to non-residents, or paying royalties must withhold tax on such amounts.
Important Dates to Remember (Companies and Close Corporations Tax in Namibia)
A Company must submit a self-assessment return of income for Companies and Close Corporations within 7 months of the company’s year-end.
This comprehensive guide provides an overview of the key elements of Companies and Close Corporations taxation, including tax rates, deductable expenses, non-deductible expenses, withholding tax obligations, and important submission dates. By understanding these aspects, Companies and Close Corporations can ensure compliance with tax regulations while optimizing their financial strategies.
Please note that this article serves as a general guide and should not be considered as professional tax advice. It is recommended to consult with a tax professional for specific tax planning and compliance requirements.
FAQ: Companies and Close Corporations Tax in Namibia
Q: What is companies and close corporations tax?
A: Companies and close corporations tax is the tax that companies and close corporations in Namibia are required to pay on the profits they earn.
Q: What are the tax rates for companies in Namibia? (Companies and Close Corporations Tax in Namibia)
A: Companies that do not engage in mining activities are subject to a flat tax rate of 32%.
Q: When are provisional tax payments due for companies in Namibia?
A: Companies in Namibia are required to make two provisional tax payments each year. The first payment and return are due within 6 months after the start of the financial year, and the second payment and return are due at the end of the financial year.
Q: Is a Public Officer required for companies and close corporations in Namibia?
A: Yes, a company conducting business in Namibia is required to appoint a Public Officer to represent it for tax affairs.
Q: What expenses can be deducted for tax purposes? (Companies and Close Corporations Tax in Namibia)
A: Deductible expenses include expenditure incurred to produce income, repairs made to the place of business, one-third of the cost of capital expenditure (excluding sold items), and a deductible allowance for the cost of erecting a building.
Q: Are there any expenses that cannot be deducted for tax purposes?
A: Certain expenses are not allowed as deductions from income, including domestic or private expenses, expenses not related to the production of income, amount paid in respect of land tax, and expenses recoverable from an insurance contract.
Q: Are there any withholding tax obligations for companies in Namibia? (Companies and Close Corporations Tax in Namibia)
A: Yes, companies in Namibia must withhold tax on dividends paid to non-resident shareholders, interest paid to non-residents, and royalties paid.
Q: What are the important submission dates for companies and close corporations in Namibia?
A: Companies and close corporations in Namibia must submit a self-assessment return of income within 7 months of the company’s year-end.
Please note that the information provided here is a general guide and should not be considered as professional tax advice. It is recommended to consult with a tax professional for specific tax planning and compliance requirements.
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