Faculty of Management Sciences
Unit 7: Withholding taxes (non-
residents)
Different withholding taxes levied in Namibia iro of
non-residents
Final tax – s 41 -48; 35; 35A; 35B
Final tax – no other taxes are further levied
Types:
◦
◦
◦
◦
NRST (non-residents shareholders tax)
WHTS (withholding tax on services)
WHTR (withholding tax on royalties)
WHTI (withholding tax on interest)
➢
Late payments:
➢10% penalties per month or part thereof, limited to
amount of tax
➢20% interest p.a
Tax on dividends received by a non-resident
shareholder.
Dividends defined – includes any amount
distributed by a co. to its shareholders or any
amount distributed out of the assets
pertaining to a unit portfolio to shareholders
of the unit portfolio.
Excludes: payments made from share
premium account unless it arose out of
transfers to it from distributable reserves.
Person liable: person who receives the
dividend
Recovery of tax: Co. declaring the dividend.
◦ Withhold the NRST
◦ Pay over to RoR
Tax on services obtained from non-resident.
Services: management fees; consultancy;
entertainment and directors fees.
Management & consulting fees specifically
defined:
◦ “Any amount payable for administrative; managerial;
technical or consultative services or any similar services;
whether such services are of a professional nature or
not”
Person liable: person who renders the service
Recovery of tax: Person who makes payment for
service:
◦ Withhold tax on services
◦ Pay over to RoR
Tax on royalties paid by a resident to a nonresident
A royalty includes:
◦ Payment for the use or right to use any patent; design;
trademark; copyright; model; pattern; plan; formula or
process or any other property or right of a similar
nature.
◦ The imparting of any scientific, technical; industrial or
commercial knowledge or information for use in
Namibia.
◦ The right to use industrial, commercial or scientific
equipment (i.e including rental therof).
Nature of fee to be carefully examined in order to
conclude if WHTR are applicable.
Person liable: person that received the royalty
payment
Recovery of tax: person making the royalty
payment:
◦ Withhold the tax on royalty
◦ Pay over to RoR
Tax on interest received by or accruing to a
non-resident
Enacted on 30 December 2015
S35B defines interest
Interest is deemed to be paid on the earlier of
the date on which:
◦ it is paid or;
◦ becomes due and payable
Due and payable not defined in the Act - use
SA case law: “amount not only owing but due
to be paid”
WHTI triggered when interest is actually paid
or becomes due and payable, whichever is the
earlier.
Person liable: person that the interest is
received by or accrued to
Recovery of tax: Person that is liable to pay
the interest.
◦ Withhold the tax on Interest
◦ Pay over to RoR
Taxation of Avoidance and Tax evasion.
Tax Administration
Income Tax Act no.24 of 1981
LexisNexis: Concise guide to Tax in Namibia
by D Clegg & C Kotze. 2018
PwC: Namibian Income Tax Guide. 2021
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