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The Namibian skills shortage and strong growth in
specialist industries in our economy require skilled expatriates to
work in Namibia. These are some of the common issues that Namibian
expats and their employers will have to deal
with.
1. Determining taxability
in Namibia
Namibia's tax system is based on the source principle and
not residency.
All non-resident individuals, should submit tax returns in
respect of Namibian source income.
An expatriate may be exempted from paying taxes in Namibia
where a Double Tax Agreement was concluded between Namibia and the
individual's home country.
Careful consideration should be given to the tax implications
in both the home country and Namibia.
Split remuneration, employee stock options and long-term
deferred compensation schemes for expatriates are specific areas
that require early planning.
2. Taxing Employment Income
Any amount, including a voluntary award, received by or accrued
to a person in cash or kind, in respect of rendering services or
employment , will be considered to be employment income.
This includes the value of fringe benefits in respect of such
services or employment.
Taxation paid on behalf of expatriates (who receive salaries
net of taxes) is also considered a fringe benefit and a gross-up
calculation should be done to determine the tax on this
benefit.
Employment income (remuneration) thus includes salaries, wages,
leave pay, overtime, bonuses, allowances, commissions, fees,
emoluments, pensions, annuities, superannuation, gratuities,
retiring allowance or stipend, certain lump sum payments and fringe
benefits (e.g. housing, school fees, home visit airfares).
3. Social Security
The employer as well as each employee (irrespective whether an
expatriate or not) should be registered with the Social Security
Commissioner, and make monthly contributions in this regard.
4. Namibia tax filing
requirements
The expatriate should register as a taxpayer; and
Deregister when he/she leaves Namibia.
Pay As You Earn (PAYE) on remuneration should be deducted and
paid over monthly by the employer.
An annual PAYE 5 certificate should be issued for the
expatriate (to be filed with the annual income tax return).
Annual income tax returns for salaried individuals are due on
30 June.
5. Work permit and Visa
requirements
Our article on contains a roundup of Namibian Immigration
requirements.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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By establishing a forum to promote the sharing of resources, the BRICS countries may be able to provide working solutions for the problems being experienced by developing nations in applying the OECD methods.
A discussion on a recent case, where SARS suspected the defendant for having had fraudulently manipulated invoices so as to pay less duty, thereby committing various offences under the Customs and Excise Act.
The Financial Mail reported in its January 25 edition that SARS is considering changing the basis of customs valuations from the present free-on-board principle to a valuation based upon cost, insurance and freight.
Section 66 of the Income Tax Act No. 58 of 1962 requires the Commissioner to give public notice annually of the prescribed time period within which persons who are liable to taxation under the Act must furnish their tax returns.
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