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.