Income Tax Act, 1981

Act 24 of 1981

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Citation

Act 24 of 1981

Date

Language

English

Type

Act

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Income Tax Act, 1981

Act 24 of 1981

Published in Official Gazette 4580 on 31 December 1981
Assented to on 21 December 1981
Commenced on 31 December 1981
[This is the version of this document from 16 September 2024 and includes any amendments published up to 20 September 2024.]

[Amended by Income Tax Amendment Act, 1982 (Act 12 of 1982) on 16 July 1982]
[Amended by Income Tax Amendment Proclamation, 1985 (Proclamation AG10 of 1985) on 1 January 1985]
[Amended by Income Tax Amendment Act, 1985 (Act 13 of 1985) on 1 July 1985]
[Amended by Income Tax Amendment Act, 1986 (Act 11 of 1986) on 1 March 1986]
[Amended by Income Tax Amendment Act, 1991 (Act 8 of 1991) on 1 March 1987]
[Amended by Income Tax Amendment Act, 1987 (Act 8 of 1987) on 1 January 1988]
[Amended by Income Tax Amendment Act, 1989 (Act 1 of 1989) on 1 March 1988]
[Amended by Second Law Amendment (Abolition of Discriminatory or Restrictive Laws for purposes of Free and Fair Election) Proclamation, 1989 (Proclamation AG25 of 1989) on 1 April 1989]
[Amended by Second Income Tax Amendment Act, 1991 (Act 12 of 1991) on 1 March 1991]
[Amended by Third Income Tax Amendment Act, 1991 (Act 33 of 1991) on 1 March 1991]
[Amended by Income Tax Amendment Act, 1992 (Act 25 of 1992) on 1 March 1992]
[Amended by Petroleum (Taxation) Act, 1991 (Act 3 of 1991) on 30 September 1992]
[Amended by Income Tax Amendment Act, 1993 (Act 10 of 1993) on 1 January 1993]
[Amended by Income Tax Amendment Act, 1994 (Act 17 of 1994) on 1 January 1994]
[Amended by Income Tax Amendment Act, 1995 (Act 22 of 1995) on 1 January 1995]
[Amended by Income Tax Amendment Act, 1996 (Act 12 of 1996) on 1 January 1996]
[Amended by Income Tax Amendment Act, 1997 (Act 5 of 1997) on 1 March 1997]
[Amended by Income Tax Amendment Act, 1998 (Act 13 of 1998) on 1 January 1998]
[Amended by Income Tax Amendment Act, 1999 (Act 7 of 1999) on 1 January 1999]
[Amended by Income Tax Second Amendment Act, 1999 (Act 21 of 1999) on 1 January 1999]
[Amended by Appeal Laws Amendment Act, 2001 (Act 10 of 2001) on 25 July 2001]
[Amended by Income Tax Amendment Act, 2002 (Act 7 of 2002) on 1 January 2002]
[Amended by Income Tax Amendment Act, 2003 (Act 11 of 2003) on 1 January 2003]
[Amended by Income Tax Amendment Act, 2005 (Act 4 of 2005) on 14 May 2005]
[Amended by Income Tax Amendment Act, 2007 (Act 5 of 2007) on 27 December 2007]
[Amended by Income Tax Amendment Act, 2010 (Act 5 of 2010) on 30 April 2010]
[Amended by Income Tax Second Amendment Act, 2011 (Act 7 of 2011) on 14 July 2011]
[Amended by Income Tax Third Amendment Act, 2011 (Act 15 of 2011) on 30 December 2011]
[Amended by Income Tax Amendment Act, 2013 (Act 4 of 2013) on 1 January 2013]
[Amended by Income Tax Amendment Act, 2015 (Act 13 of 2015) on 30 December 2015]
[Amended by Income Tax Amendment Act, 2016 (Act 4 of 2016) on 21 June 2016]
[Amended by Income Tax Amendment Act, 2020 (Act 2 of 2020) on 31 December 2020]
[Amended by Income Tax Laws Amendment Act, 2021 (Act 5 of 2021) on 16 December 2021]
[Amended by Income Tax Amendment Act, 2022 (Act 13 of 2022) on 1 January 2023]
[Amended by Repeal of Obsolete Laws Act, 2022 (Act 12 of 2022) on 15 February 2023]
[Amended by Abolition of Payment by Cheque Act, 2022 (Act 16 of 2022) on 15 March 2023]
[Amended by Income Tax Amendment Act, 2024 (Act 4 of 2024) on 16 September 2024]

[Income Tax Act 24 of 1981 (OG 4580) came into force on date of publication: 31 December 1981; applied to natural persons who are “citizens of Rehoboth” with certain amendments, with effect from 31 December 1981; see Act 5 of 1982 (Rehoboth),(Official Gazette 86 of Rehoboth, dated 23 December 1983)][as amended by][Income Tax Amendment Act 12 of 1982 (OG 4656) came into force on date of publication: 16 July 1982, unless otherwise provided (see annotations to individual sections)][Income Tax Amendment Proclamation, AG 10 of 1985 (OG 5016) deemed to have come into force as from the commencement of the year of assessment ending on or after 1 January 1985 (section 17 of AG 10 of 1985), unless otherwise provided (see annotations to individual sections)][Income Tax Amendment Act 13 of 1985 (OG 5115) deemed to have come into force “from the beginning of the financial year of a company ending on or after 1 July 1985” (section 2 of Act 13 of 1985)][Income Tax Amendment Act 11 of 1986 (OG 5234) deemed to have come into force on 1 March 1986 (section 2 of Act 11 of 1986)][Income Tax Amendment Act 8 of 1987 (OG 5400) “the amendments effected to the principal Act by this Act shall come into operation, or shall be deemed to have come into operation, save in so far as the context indicates otherwise, at the beginning of the year of assessment ending on or after 1 January 1988” (section 12 of Act 8 of 1987)][Income Tax Amendment Act 1 of 1989 (OG 5675) deemed to have come into force on 1 March 1988 (section 2 of Act 1 of 1989)][Second Law Amendment (Abolition of Discriminatory or Restrictive Laws for purposes of Free and Fair Election) Proclamation, AG 25 of 1989 (OG 5758) relevant portion deemed to have come into force on 1 April 1989 (section 2(2) of AG 25 of 1989)][Petroleum (Taxation) Act 3 of 1991 (GG 179) came into force on 30 September 1992 (section 25 of Act 3 of 1991, as amended by the Petroleum Matters (Amendment and Validation) Act 27 of 1992)][Income Tax Amendment Act 8 of 1991 (GG 222) (a) “in relation to a person referred to in subsection (2)(a) of section 16A, as inserted by this Act”, deemed to have come into force on 1 March 1987, and (b) in relation to any other person, deemed to have come into force on 1 March 1990 (section 3 of Act 8 of 1991)][Second Income Tax Amendment Act 12 of 1991 (GG 229) deemed to have come into force at the beginning of the year of assessment commencing on or after 1 March 1991 (section 9 of Act 12 of 1991), unless otherwise provided (see annotations to individual sections)][Third Income Tax Amendment Act 33 of 1991 (GG 335) deemed to have come into force on 1 March 1991 (section 2 of Act 33 of 1991)][Income Tax Amendment Act 25 of 1992 (GG 487) deemed to have come into force (a) in the case of any taxpayer other than a company, at the beginning of the year of assessment commencing on or after 1 March 1992; and (b) in the case of any taxpayer which is a company, at the beginning of the financial year of such company ending on or after 1 March 1992 (section 22(1) of Act 25 of 1992), unless otherwise provided (see annotations to individual sections)][Income Tax Amendment Act 10 of 1993 (GG 693) deemed to have come into force (a) in the case of any taxpayer other than a company, at the beginning of the year of assessment commencing on or after 1 March 1993; and (b) in the case of any taxpayer which is a company, at the beginning of the year of assessment of such company commencing on or after 1 January 1993 (section 15 of Act 10 of 1993)][Income Tax Amendment Act 17 of 1994 (GG 932) deemed to have come into force (a) in the case of any taxpayer other than a company, at the beginning of the year of assessment commencing on or after 1 March 1994; and (b) in the case of any taxpayer which is a company, at the beginning of the year of assessment of such company commencing on or after 1 January 1994 (section 11 of Act 17 of 1994), of 1994, unless otherwise provided (see annotations to individual sections)][Income Tax Amendment Act 22 of 1995 (GG 1225) deemed to have come into force (a) in the case of any taxpayer other than a company, at the beginning of the year of assessment commencing on or after 1 March 1995; and (b) in the case of any taxpayer which is a company, at the beginning of the year of assessment of such company commencing on or after 1 January 1995 (section 14 of Act 22 of 1995), unless otherwise provided (see annotations to individual sections); note that Act 22 of 1995 is amended by Act 12 of 1996][Income Tax Amendment Act 12 of 1996 (GG 1375) deemed to have come into force (a) in the case of any taxpayer other than a company, at the beginning of the year of assessment commencing on or after I March 1996; and (b) in the case of any taxpayer which is a company, at the beginning of the year of assessment of such company commencing on or after 1 January 1996 (section 31 of Act 12 of 1996), unless otherwise provided (see annotations to individual sections)][Income Tax Amendment Act 5 of 1997 (GG 1680) different commencement dates for different sections and for different categories of taxpayers (section 12 of Act 5 of 1997; see annotations to individual sections)][Income Tax Amendment Act 13 of 1998 (GG 1882) deemed to have come into force (a) in the case of a taxpayer other than a company, at the commencement of the year of assessment commencing on or after 1 March 1998; and (b) in the case of a taxpayer which is a company, at the commencement of the year of assessment of such company on or after 1 January 1998 (section 2 of Act 13 of 1998)][Income Tax Amendment Act 7 of 1999 (GG 2135) deemed to have come into force (a) in the case of any taxpayer other than a company, at the commencement of the year of assessment commencing on or after 1 March 1999; and (b) in the case of any taxpayer which is a company, at the commencement of the year of assessment of such company on or after 1 January 1999 (section 2 of Act 7 of 1999)][Income Tax Second Amendment Act 21 of 1999 (GG 2240) deemed to have come into force (a) in the case of any taxpayer other than a company, at the beginning of the year of assessment commencing on or after 1 March 1999; and (b) in the case of any taxpayer which is a company, at the beginning of the year of assessment of such company commencing on or after 1 January 1999 (section 15 of Act 21 of 1999), unless otherwise provided (see annotations to individual sections)][Appeal Laws Amendment Act 10 of 2001 (GG 2585) came into force on date of publication: 25 July 2001][Income Tax Amendment Act 7 of 2002 (GG 2820) deemed to have come into force (a) in the case of a taxpayer other than a company, at the beginning of the year of assessment commencing on or after 1 March 2002; and (b) in the case of a taxpayer which is a company, at the beginning of the year of assessment of such company commencing on or after 1 January 2002 (section 14 of Act 7 of 2002), unless otherwise provided (see annotations to individual sections)][Income Tax Amendment Act 11 of 2003 (GG 3049) deemed to have come into force in relation to a taxpayer other than a company at the commencement of the year of assessment commencing on or after March 2003 (section 2 of Act 11 of 2003)][Income Tax Amendment Act 4 of 2005 (GG 3428) came into force on date of publication: 14 May 2005, unless otherwise provided (see annotations to individual sections)][Income Tax Amendment Act 5 of 2007 (GG 3964) came into force on date of publication: 27 December 2007, unless otherwise provided (see annotations to individual sections)][Income Tax Amendment Act 5 of 2010 (GG 4475) came into force on date of publication: 30 April 2010, or in the case of a taxpayer other than a company, at the beginning of the year of assessment commencing on or after 1 March 2009, (section 9(a) of Act 5 of 2010), unless otherwise provided (see annotations to individual sections)][The Act was amended by the Income Tax Amendment Act 3 of 2011, which was promulgated by Government Notice 79/2011 (GG 4732). Its purpose, according to the long title was “To amend the Income Tax Act, 1981, so as to amend the definitions of “person”, “pension”, “preservation fund” and “retirement annuity fund” to increase the amount which may be commuted for a single tax free payment; to increase the exemption from tax on a lump sum derived on retirement or retrenchment; to delete allowable deductions to mining companies in respect of rehabilitation expenditure; to provide for the administration of withholding tax on interest; to increase the threshold on income tax payable by individuals; to reduce the tax rate payable by non-mining companies; and to provide for incidental matters”. However, this Government Notice was withdrawn by Government Notice 150/2011 (GG 4787): “Government Notice No. 79 of 10 June 2011 under which the Income Tax Amendment Act, 2011 (Act No. 3 of 2011) was published is withdrawn.” Act 3 of 2011 was not subsequently published, so the amendments made by it have not been incorporated here.][Income Tax Second Amendment Act 7 of 2011 (GG 4755) came into force on date of publication: 14 July 2011][Income Tax Third Amendment Act 15 of 2011 (GG 4864) came into force generally on date of publication: 30 December 2011, but came into force (a) in the case of any taxpayer other than a company, at the commencement of the year of assessment commencing on or after 1 March 2012; and (b) in the case of any taxpayer which is a company, at the commencement of the year of assessment of such company commencing on or after 1 January 2012, unless otherwise provided (see annotations to individual sections)][Income Tax Amendment Act 4 of 2013 (GG 5206) deemed to have come into force (a) in the case of any taxpayer, other than a company, at the commencement of the year of assessment commencing on or after 1 March 2013; and (b) in the case of any taxpayer which is a company, at the commencement of the year of assessment of such company on or after 1 January 2013 (section 2 of Act 4 of 2013)][Income Tax Amendment Act 13 of 2015 (GG 5912) came into force on date of publication: 30 December 2015 unless otherwise provided (see annotations to individual sections)][Income Tax Amendment Act 4 of 2016 (GG 6044) came into force on date of publication: 21 June 2016][The Act was applied to “citizens of Rehoboth”, subject to certain amendments, by section 2(1)(a) of the “Application of the Income Tax Act to Citizens of Rehoboth Act 5 of 1982 (Rehoboth)”, (Official Gazette 86 of Rehoboth, dated 23 December 1983): “The Income Tax Act, 1981 (Act 24 of 1981) of the National Assembly of South West Africa, (hereinafter referred to as the Act), shall, subject to the provisions of this Act and in so far as the first-mentioned Act applies to natural persons, apply also to citizens of Rehoboth.” Section 2(1)(a) was deemed to have come into force on 31 December 1981, in terms of section 2(1)(b) of Act 5 of 1982 (Rehoboth). Section 2(2) provided that any future amendments of the Act would be applicable to “citizens of Rehoboth”, insofar as those amendments applied to natural persons. The amendments made in respect of the “citizens of Rehoboth” by Act 5 of 1982 (Rehoboth) are indicated in annotations to the affected sections.][Income Tax Amendment Act 2 of 2020 (GG 7249) deemed to have come into force on 31 December 2020, except section 1(2) which has subsequently been deleted by section 1 of the Income Tax Laws Amendment Act 5 of 2021; section 2 which will come into operation at the end of five years commencing on 31 December 2020; and section 3 which comes into operation: (a) at the end of five years commencing on 31 December 2020, in respect of an export processing zone enterprise that holds an export processing zone enterprise certificate issued under section 14 of the Export Processing Zones Act 9 of 1995 on or before 31 December 2020; and (b) on 31 December 2020, in respect of an export processing zone enterprise that obtains an export processing zone enterprise certificate issued under section 14 of the Export Processing Zones Act 9 of 1995, after 31 December 2020. See Government Notice 329/2020.][The Act was amended by the substitution, wherever they occur, for the symbol "R" of the symbol "N$" and for the currency "Rand" of the currency "Namibia Dollar", by section 1 of Act 4 of 2024]ACTTo consolidate and amend the law relating to the taxation of income; and to provide for incidental matters.(Afrikaans text signed by the Administrator-General on 21 December 1981)BE IT ENACTED by the National Assembly of South West Africa, as follows:-[Section 2(3) of Act 5 of 1982 (Rehoboth) provides as follows:][“In applying the Act and any amendment thereof to citizens of Rehoboth -][(a) the references to the Government of the territory in section 81(2) and 83(1) of, and paragraphs 4 and 32 of Schedule 2 to, such Act, shall be construed as references to the Government of Rehoboth; and][(b) any reference in such Act or amendment to -][(i) the Council of Ministers, shall be construed as a reference to the Kaptein's Council;][(ii) the Chairman of the Council of Ministers, shall be construed as a reference to the Kaptein;][(iii) a Representative Authority, shall be construed as a reference aslo [also] to the Government of Rehoboth;][(iv) the Secretary, shall be construed as a reference to the Chief Director of Rehoboth;][(v) the Central Revenue Fund, shall be construed as a reference to the Rehoboth Revenue Fund;][(vi) the Official Gazette, shall be construed as a reference to the Official Gazette of Rehoboth;][(vii) the Auditor-General, shall be construed as a reference to the Auditor-General appointed under section 22 of the State Finance Act, 1982 (Act 1 of 1982), of the National Assembly and, until such time as the Legislative Authority of Rehoboth has provided otherwise by law, as a reference also to the Auditor-General of the Republic of South Africa;][The State Finance Act 1 of 1982 has been replaced by the State Finance Act 31 of 1991.][(viii) the Secretary for Agriculture and Nature Conservation, shall be construed as a reference to the Director of Agriculture and Works of Rehoboth.”][Act 12 of 1991 makes the following substitutions throughout the Act: * “Permanent Secretary” for “Secretary”; and * “Namibia” for “the territory”.][Act 12 of 1996 makes the following substitutions throughout the Act: * “Minister” for “Permanent Secretary”; and * “State Revenue Fund” for “Central Revenue Fund”.][The Act is inconsistent in its use of “percent” and “per cent”.]

1. Interpretation

Unless the context otherwise indicates -“agent” includes any partnership or company or any other body of persons corporate or unincorporate acting as an agent;“assessment” means the determination by the Minister -(a)of an amount upon which any tax leviable under this Act is chargeable; or(b)of the amount of any such tax; or(c)of the amount of any loss ranking for set-off,and for the purposes of Part III of Chapter III includes any determination by the Minister which is in terms of this Act subject to objection and appeal;[The definition of “assessment” is amended by Act 22 of 1995. It is also amended by Act 5 of 1997, with this amendment deemed to have come into force (a) in the case of any taxpayer other than a company, at the beginning of the year of assessment commencing on or after 1 March 1997; and (b) in the case of any taxpayer which is a company, at the beginning of the year of assessment of such company commencing on or after 1 January 1997 (section 12(a) of Act 5 of 1997).]“benefit fund” means -(a)any friendly society registered under the Friendly Societies Act, 1956 (Act 25 of 1956) and which is approved by the Minister;(b)any medical scheme registered under the Medical Schemes Act, 1967 (Act 72 of 1967); or[The Medical Schemes Act 72 of 1967 has been replaced by the Medical Aid Funds Act 23 of 1995.](c)any fund (other than a pension fund, provident fund or retirement annuity fund) which, in respect of the year of assessment in question, the Minister is satisfied is a permanent fund bona fide established for the purpose of providing sickness, accident or unemployment benefits for its members, or mainly for any such purpose, and also for the purpose of providing benefits for the spouses, children, dependants or nominees of deceased members;[definition of “benefit fund” inserted by Act 25 of 1992]“boat” means any vessel used or capable of being used in, under or on the sea or internal waters, whether -(a)self-propelled or not; or(b)equipped with an inboard or outboard motor;[definition of “boat” inserted by Act 15 of 2011]“bonus debentures or securities” means debentures or securities issued by a company, whether by way of a bonus award or otherwise, in such manner that the company’s reserves or unappropriated profits are in whole or in part applied in paying up such debentures or securities;“building society” means a building society registered in terms of the Building Societies Act, 1986 (Act 2 of 1986);[definition of “building society” inserted by Act 25 of 1992]“capitalization shares” means shares issued by a company, whether by way of a bonus award or otherwise, in such manner that the company’s reserves (including any share premium account) or unappropriated profits are in whole or in part applied in paying up such shares;“Commissioner” means the Commissioner of Inland Revenue;[definition of “Commissioner” inserted by Act 4 of 2005][Section 26 and section 39(11) of the Namibia Revenue Agency Act 12 of 2017 both provide that a reference in any law to the Commissioner of Inland Revenue must now be construed as a reference to the Commissioner of the Revenue Agency.]“company” includes -(a)any association, corporation or company incorporated or deemed to be incorporated by or under any law in force in Namibia or in any part thereof, or any body corporate formed or established or deemed to be formed or established by or under any such law; or(b)any association, corporation or company incorporated under the law of any country other than Namibia or any body corporate formed or established under such law, if such association, corporation, company or body, as the case may be, carries on business or has an office or place of business in Namibia or derives income from any source within or deemed to be within Namibia or in which any person ordinarily resident or carrying on business in Namibia is interested as a shareholder or member; or(c)any association, corporation or company incorporated under the law of any country other than Namibia or any body corporate formed or established under such law, if such association, corporation, company or body, as the case may be, is a shareholder in or member of any company as defined in paragraph (a) or (b), either directly, or indirectly by reason of the fact that it is a shareholder in or member of any other company; or(d)any association (not being an association referred to in paragraph (a) or an association to which the provisions of paragraph (i) of subsection (1) of section 16 apply) formed in Namibia to serve a specified purpose, beneficial to the public in Namibia or a section of the public in Namibia; or(e)any unit trust scheme, whether in property shares or in securities other than property shares, managed or carried on by any company registered as a management company under the Unit Trusts Control Act, 1981 (Act No. 54 of 1981);[paragraph (e) of definition of “company” amended by Act 22 of 1995 and substituted by Act 21 of 1999]“date of assessment”, in relation to any assessment, means the date specified in the notice of such assessment as the due date or, where a due date is not so specified, the date of such notice;“dividend” means any amount distributed by a company (not being a building society or an association or institution to which section 16(1)(d) applies) to its shareholders or any amount (excluding interest) distributed out of the assets pertaining to any unit portfolio referred to in paragraph (e) of the definition of “company” in this section to shareholders in relation to such unit portfolio (including, in the case of any co-operative society or company referred to in section 31, any amount distributed to its members, whether divided among the members in accordance with their rights as shareholders or according to the value of business transactions between individual members and such society or company or in some other basis), and in this definition the expression “amount distributed” includes -[The introductory portion of the definition of “dividend” is amended by Act 25 of 1992 and by Act 5 of 2007 with effect from 1 March 2008 (section 12(5) of Act 5 of 2007). The phrase “in some other basis” should be “on some other basis”.](a)in relation to a company that is being wound up or liquidated, any profits distributed, whether in cash or otherwise, other than those of a capital nature, earned before or during the winding-up or liquidation (any such profits distributed by the liquidator of the company being deemed for the purposes of this definition to have been distributed by the company);(b)in relation to a company that is not being wound up or liquidated, any profits distributed, whether in cash or otherwise, and whether of a capital nature or not, including an amount equal to the nominal value, at the time of issue thereof, of any capitalization shares awarded to shareholders and the nominal value of any bonus debentures or securities awarded to shareholders;(c)in the event of the partial reduction or redemption of the capital of a company, so much of the sum of any cash and the value of any asset given to a shareholder as exceeds the cash equivalent of the amount by which the nominal value of the shares of that shareholder is reduced; and(d)in the event of the reconstruction of a company, so much of the sum of any cash and the value of any asset given to a shareholder as exceeds the nominal value of the shares held by him before the reconstruction,but does not include -(e)the nominal value of any capitalization shares awarded to a shareholder to the extent to which such shares have been paid up by means of the application of the whole or any portion of the share premium account of a company; or(f)subject to the provisions of the second proviso to this definition, any cash and the value of any asset given to a shareholder to the extent to which the cash and the value of the asset represents a reduction of the share premium account of a company; or(g)so much of the nominal value of any capitalization shares awarded to shareholders on or before 30 June 1975 as part of the equity share capital of a company by a company which during the period of ten years ending the day before the date of such award has made any partial reduction of its paid-up share capital involving a distribution to shareholders of cash or other assets, as exceeds the sum of the amounts which in the opinion of the Minister were available for distribution to shareholders on each and every date on which the company made a partial reduction of its paid-up share capital during the said period, less the sum of so much of the nominal values of all capitalization shares awarded by such company during that period (excluding any portion of that period occurring prior to 1 July 1957) as constituted dividends for the purposes of this definition or the definition of “dividend” in section 1 of the Income Tax Act, 1941: Provided that for the purposes of this paragraph the amount available for distribution on any date on which the company made a partial reduction of its paid-up share capital shall, if that amount exceeds the nominal amount of such reduction, be deemed to be an amount equal to such nominal amount; or(h)the nominal value of any capitalization shares awarded to shareholders as part of the equity share capital of a company, if -(i)such shares are or were awarded on or before 30 June 1975 and during the period of ten years ending the day before the date of such award the company has not made any partial reduction of its paid-up share capital involving a distribution to shareholders of cash or other assets; or(ii)such shares are awarded on or after l July 1975;(i)any amount distributed by any co-operative society or company referred to in section 31 by way of a bonus, to the extent that such amount is allowable as a deduction from the income of such society or company under the provisions of section 31:Provided that the provisions of paragraphs (g) and (h) shall not apply in respect of the nominal value (or any portion thereof) of any capitalization share awarded before 1 January 1974 by any company which is recognized as a private company in terms of section 38: Provided further that, for the purposes of this definition -(i)where a company has on or after 1 January 1974 transferred any amount from reserves (excluding any share premium account) or undistributed profits to the share capital or the share premium account of the company without applying the amount in paying up capitalization shares or has applied the amount in paying up capitalization shares the nominal value of which did not in whole or in part constitute an amount distributed as contemplated in the foregoing provisions of this definition, the amount so transferred (reduced by so much thereof as constitutes such an amount distributed) shall be deemed -(aa)to the extent that such amount (as so reduced) is shown to consist of profits of a capital nature, to be a profit of a capital nature available for distribution by the company to shareholders who, in the event of a distribution by the company at any time (whether before or during the winding-up or liquidation of the company) of profits of a capital nature would be entitled to participate in such a distribution; and(bb)to the extent that subparagraph (aa) does not apply, to be a profit which is not of a capital nature and is available for distribution by the company to shareholders who, in the event of a distribution by the company at any time (whether before or during the winding-up or liquidation of the company) of profits which are not of a capital nature would be entitled to participate in such a distribution,regardless of whether in either case the company in fact has or has not any profits available for distribution;(ii)where the share capital of the company consists of different classes of share capital, any amount deemed by paragraph (i) of this proviso to be available for distribution to shareholders shall, in applying that paragraph, be apportioned between such classes of share capital in accordance with the rights of the holders of the corresponding classes of shares to participate in. distributions of profits of a capital nature or profits which are not of a capital nature, as the case may be, and the amount deemed by the said paragraph to be available for distribution to the shareholders in respect of any such class of shares shall be the amount allocated to the share capital of that class under such apportionment;(iii)where any amount is under the provisions of paragraph (i) of this proviso or that paragraph as applied by paragraph (ii) of this proviso, deemed to be a profit available for distribution to shareholders and any of the shares of any class (hereinafter referred to as the original shares) held by any such shareholders are converted into shares of any other class or the original shares are cancelled and shares of any other class are issued in place of the original shares, the said amount shall, to the extent that it relates to or may have been apportioned to the original shares be deemed to relate to and to be a profit available for distribution to the shareholders in respect of the shares of such other class and the provisions of this proviso shall, to the extent that the said amount is deemed to consist of a profit as aforesaid, apply in respect of such amount as though it were an amount referred to in paragraph (i) of this proviso, and the shareholders in respect of the shares of such other class shall, regardless of the rights attaching to such shares, be deemed as respects the said amount to be entitled to participate in profits of the same nature as the profit deemed by this paragraph to be available for distribution to the shareholders, whether such profit is of a capital nature or is not of a capital nature;(iv)subject to the provisions of paragraphs (iii) and (vi) of this proviso, where any amount is under the provisions of paragraph (i) of this proviso or that paragraph as applied by paragraph (ii) of this proviso, deemed to be a profit available for distribution to shareholders and any shares issued by the company are cancelled without a return of the share capital or any share premium relating to such shares, such share capital or share premium or any reserve created by reason of the cancellation of such shares shall, to the extent that the said profit may be apportioned to the said shares, be deemed to consist of a profit (of the same nature as the aforesaid profit) available for distribution to shareholders who are or may become interested in such share capital, share premium or reserve, and where any cash is or any assets are given to shareholders by way of a return of or a distribution out of such share capital, share premium or reserve, the sum of the amount of such cash and the value of such assets shall, to the extent that such sum does not exceed the amount deemed by this paragraph to consist of a profit available for distribution to shareholders, be deemed to be a profit (of the same nature as the first-mentioned profit) distributed to the shareholders;(v)if, in the event of the subsequent partial reduction or redemption of the share capital (including any share premium) of the company or the reconstruction of the company, any cash or any asset is given to shareholders and such cash or asset (or a portion thereof) represents a return of share capital or share premium, the amount of share capital or share premium so returned -(aa)to shareholders entitled to participate in distributions of profits which are not of a capital nature and in respect of whom any amount is deemed under paragraph (i) (bb) of this proviso to be such a profit available for distribution to such shareholders, shall (to the extent that the amount returned to such shareholders does not exceed the aggregate of the amounts of the profits so deemed to be available for distribution to such shareholders) be deemed to be a profit, not of a capital nature, distributed to such shareholders, and the amounts so deemed to be available for distribution shall be deemed to have been reduced accordingly; or(bb)to shareholders entitled to participate in distributions of profits of a capital nature and in respect of whom any amount is deemed under paragraph (i)(aa) of this proviso to be such a profit available for distribution to such shareholders, shall (to the extent that the amount returned to such shareholders (less so much thereof as is deemed under sub-paragraph (aa) of this paragraph to be a profit, not of a capital nature, distributed to such shareholders) does not exceed the aggregate of the amounts of the profits deemed under the said paragraph (i)(aa) to be available for distribution to such shareholders) be deemed to be a profit of a capital nature distributed to such shareholders and the amounts so available for distribution shall be deemed to have been reduced accordingly;(vi)where the company has lost some of its paid-up share capital (including any share premium) as a result of losses actually incurred by it and such share capital is in consequence partially reduced to take account of such losses, any amounts which in terms of this proviso are at the date of such partial reduction of such share capital deemed to be profits available for distribution to shareholders shall be deemed to have been reduced to the extent that such losses are so accounted for and in such manner that, as far as possible and on the basis, where necessary, of an apportionment between different classes of share capital in accordance with the rights of shareholders -(aa)any such profits which are of a capital nature and relate to shareholders entitled to participate in profits of that nature, are reduced by so much of the amount by which the said share capital is reduced as is attributable to losses of a capital nature; and(bb)any such profits which are not of a capital nature and relate to shareholders entitled to participate in profits which are not of a capital nature, are reduced by so much of the amount by which the said share capital is reduced as is attributable to losses which are not of a capital nature;(vii)in the event of the winding-up or liquidation of the company -(aa)any profits which in terms of the preceding provisions of this proviso are, at the commencement of the winding-up or liquidation, deemed to be available for distribution to shareholders shall, if the company has lost some of its paid-up share capital (including any share premium) as a result of losses actually incurred by it, be deemed to have been reduced in such manner that, as far as possible and on the basis, where necessary, of an apportionment between different classes of share capital in accordance with the rights of shareholders -(A)any such profits which are of a capital nature and relate to shareholders entitled to participate in profits of that nature, are reduced by so much of the loss of the said share capital as is attributable to losses of a capital nature; and(B)any such profits which are not of a capital nature and relate to shareholders entitled to participate in profits which are not of a capital nature, are reduced by so much of the loss of the said share capital as is attributable to losses which are not of a capital nature; and(bb)the aggregate of any cash and the value of any assets given to shareholders entitled to participate in profits not of a capital nature shall, to the extent that such aggregate exceeds so much of the sum of the share capital and any share premium contributed by such shareholders (less so much of such share capital and share premium as has been lost) as remains after deducting therefrom an amount equal to so much of any profits, not of a capital nature, which are deemed by this proviso (after applying subparagraph (aa) of this paragraph) to be available for distribution to such shareholders at the commencement of the winding-up or liquidation, as relates to the said share capital, be deemed to be a profit, not of a capital nature, distributed to such shareholders, but the amount of that profit shall not be determined at an amount which exceeds the aforesaid amount:Provided further that for the purposes of this definition an asset shall be deemed to have been given to a shareholder of a company if any asset or any interest, benefit or advantage measurable in terms of money is given or transferred to such shareholder or if the shareholder is relieved of any obligation measurable in terms of money: Provided further that a reserve of any company which consists of or includes any amount transferred from the share premium account of the company shall, except to the extent to which the Minister is satisfied that such reserve consists of any other amount, be deemed for the purposes of this definition to be a share premium account of, or share premium received by, such company;“domestic company” means a Namibia company or a company which is managed and controlled in Namibia;[definition of “domestic company” amended by Act 25 of 1992]“education policy” means a policy of insurance that is taken out by a tax payer exclusive and solely for the purpose of making provision for the future education or training of a child or step-child of the taxpayer contemplated by section 16(1)(ab)(ii);[definition of “education policy” inserted by Act 15 of 2011]“equity share capital” means, in relation to any company, its issued share capital excluding any part thereof which, neither as respects dividends nor as respects capital, carries any right to participate beyond a specified amount in a distribution, and the expression “equity shares” shall be construed accordingly;“executor” means any person to whom letters of administration or executorship, as the case may be, have been granted by the Master in respect of the estate of a deceased person under any law relating to the administration of estates, and includes a person acting or authorised to act under letters of administration or executorship granted outside Namibia but signed and sealed by such Master for use within Namibia and, in any case where the estate is not required to be administered under the supervision of such Master, the person administering the estate;“external company” means any company other than a domestic company;“financial year” means -(i)the period, whether of twelve months or not, commencing upon the date of incorporation or creation of such company and ending upon the last day of February immediately succeeding such date or upon such other date as the Minister having regard to the circumstances of the case may approve; or(ii)any period subsequent to the period referred to in subparagraph (i), whether of twelve months or not, commencing immediately after the specified date of that company in respect of the immediately preceding year of assessment of that company and ending upon the first anniversary of the last-mentioned specified date or upon such other date as the Minister having regard to the circumstances of the case may approve;“gross income”, in relation to any year or period of assessment, means, in the case of any person, the total amount, in cash or otherwise, received by or accrued to or in favour of such person during such year or period of assessment from a source within or deemed to be within Namibia, excluding receipts or accruals of a capital nature, but including, without in any way limiting the scope of this definition, such amounts (whether of a capital nature or not) so received or accrued as are described hereunder, namely -(a)any amount received or accrued by way of annuity;(b)any amount, including any voluntary award, received or accrued in respect of services rendered or to be rendered;(c)any amount, including any voluntary award, received or accrued in respect of the relinquishment, termination, loss, repudiation, cancellation or variation of any office or employment or of any appointment (or right or claim to be appointed) to any office or employment: Provided that the provisions of this paragraph shall not apply to any lump sum award from any pension fund, retirement annuity fund or benefit fund;[paragraph (c) amended by Act 25 of 1992](d)any amount, excluding an annuity, received by or accrued to an employee from a pension fund or a pension preservation fund: Provided that this paragraph does not apply to a lump sum payable on the termination or relinquishment of office or employment of an employee due to -(i)death;(ii)superannuation, ill-health or other infirmity proven to the satisfaction of the Minister; or(iii)retirement.[Paragraph (d) is amended by Act 12 of 1991 with effect from 1 March 1990 (section 1(2) of Act 12 of 1991), and by Act 25 of 1992 and Act 22 of 1995. It is also amended by Act 5 of 1997, with this amendment deemed to have come into force (a) in the case of any taxpayer other than a company, at the beginning of the year of assessment commencing on or after 1 March 1998; and (b) in the case of any taxpayer which is a company, at the beginning of the year of assessment commencing on or after 1 January 1998 (section 12(b) of Act 5 of 1997). It is then substituted by Act 21 of 1999, with this substitution deemed to have come into force at the beginning of the year of assessment commencing on or after 1 March 1998 (section 1(2) of Act 21 of 1999), and again substituted by Act 7 of 2002, with this substitution deemed to have come into force on 1 March 1999 (section 1(2)(a) of Act 7 of 2002). The full stop at the end of the paragraph should be a semicolon.](dA)the amount of any gain received by or accrued to any person under a single premium endowment policy or any policy of a similar nature resulting in a cash payment, other than on death or earlier disability, within ten years after the commencement of such policy, by way of any insurance benefit – including any bonus, loan or share of profits – or by way of compensation in respect of the total or partial cession by the owner of the said policy of his rights in terms of that policy: Provided that this paragraph shall apply only to policies entered into on or after 1 March 1987;[paragraph (dA) inserted by Act 8 of 1987](dB)any amount received or accrued under the rules of a provident fund upon -(i)the death or the relinquishment of office or employment of any member of the provident fund due to superannuation, ill-health or other infirmity;(ii)the termination of such a member’s employment or membership of the provident fund due to dismissal or resignation, or for any other reason; or(iii)the cessation of the provident fund;[paragraph (dB) inserted by Act 25 of 1992 and amended by Act 10 of 1993 and by Act 22 of 1995](dC)any amount received or accrued under or upon the maturity, payment, surrender or disposal of any education policy if any premium paid in respect of such policy was allowed as a deduction in terms of section 17(1)(qA);[paragraph (dC) inserted by Act 10 of 1993 and substituted by Act 15 of 2011](dD)any amount received or accrued under the rules of a preservation fund upon -(i)the withdrawal of a member’s benefit or of any portion of a member’s benefit; or(ii)the retirement or death of a member of the provident preservation fund; or(iii)the cessation of the preservation fund;[Paragraph (dD) is inserted by Act 21 of 1999, with this insertion deemed to have come into force at the beginning of the year of assessment commencing on or after 1 March 1998 (section 1(2) of Act 21 of 1999).](e)any amount received or accrued in commutation of amounts due under any contract of employment or service;(f)any amount received or accrued from another person, as premium or like consideration -(i)for the use or occupation or the right of use or occupation of land or buildings; or(ii)for the use or the right of use of plant or machinery; or(iii)for the use or the right of use of any motion picture film or any film or video tape or disc for use in connection with television or any sound recording or advertising matter connected with such motion picture film, film or video tape or disc; or(iv)for the use or the right of use of any patent or design as defined in the Patents and Designs Proclamation, 1923 (Proclamation 17 of 1923), or any trade mark as defined in the Trade Marks in South West Africa Act, 1973 (Act 48 of 1973), or any copyright as defined in the Copyright Act, 1965 (Act 63 of 1965), or any other property which in the opinion of the Minister is of a similar nature:[The Patents and Designs Proclamation 17 of 1923 will be replaced by the Industrial Property Act 1 of 2012, which has not yet been brought into force. The Copyright Act 63 of 1965 has been replaced by the Copyright and Neighbouring Rights Protection Act 6 of 1994.](g)subject to the provisions of section 16A, the value during the year of assessment of any benefit or advantage granted in respect of employment, as determined by the Minister;[paragraph (g) amended by Act 8 of 1987 and by Act 1 of 1989, substituted by Act 8 of 1991, and amended by Act 12 of 1996](h)(i)any amount received or accrued during any year of assessment by way of the disposal of any asset previously acquired if the expenditure relating to the acquisition of such asset was allowed to be deducted as capital expenditure in terms of section 18(1)(a) of the corresponding provisions of any previous income tax law, less such portion of the amount of such capital expenditure not as yet deducted by virtue of the provisions of section 36(1);(ii)any other expenditure deducted in terms of section 18(1)(a) or the corresponding provisions of any previous income tax law, which have been recovered or recouped during the current year of assessment, including recovery or recoupment by means of the withdrawal from development or exploration operations for use for non-development, exploration or mining operations or removal from Namibia of any asset, less such portion of that expenditure not yet deducted by virtue of the provisions of section 36(1): Provided that any asset so withdrawn from development, exploration or mining operations or removed from Namibia or disposed at a consideration, which is less than the fair value of such asset, shall be valued at market value for the purpose of determining the amount recovered or recouped.[Paragraph (h) is substituted by Act 22 of 1995, with this substitution deemed to have come into force (a) in the case of any taxpayer other than a company, at the beginning of the year of assessment commencing on or after 1 March 1995; and (b) in the case of any taxpayer which is a company, at the beginning of the year of assessment of such company commencing on or after 1 January 1995 (section 1(2) of Act 22 of 1995, as amended by section 30 of Act 12 of 1996). It is amended by Act 5 of 2007, with effect from (a) in the case of a tax payer other than a company, at the beginning of the year of assessment commencing on or after 1 March 2007; and (b) in the case of a tax payer which is a company, at the beginning of the year of assessment of such company on or after 1 January 2007 (section 12(4) of Act 5 of 2007).](i)any amounts received or accrued by way of dividends, including any dividends distributed by a private company out of, or by way of the capitalization of, any profits of such company which had previously been apportioned among its shareholders in terms of the provisions of any previous income tax law as the taxable income or the income subject to super tax of such company: Provided that all dividends from sources outside Namibia received by or accrued to or in favour of any person who is ordinarily resident in Namibia shall be deemed to have been received by or to have accrued to or in favour of such person from a source within Namibia;(iA)any amount derived from a building society by way of dividends or interest;[paragraph (iA) inserted by Act 25 of 1992](j)any amount received or accrued by way of grant or subsidy in respect of any soil conservation works referred to in section 19 or any of the matters mentioned in paragraph 10(1)(a) to (j) inclusive, of Schedule 1;(k)any amount received or accrued from another person as consideration (or payment of like nature) for the imparting of or the undertaking to impart any scientific, technical, industrial or commercial knowledge or information for use in Namibia, or for the rendering of or the undertaking to render any assistance or service in connection with the application or utilization of such knowledge or information;(l)in the case of any person to whom, in terms of any agreement relating to the grant to any other person of the right of use or occupation of land or buildings, or by virtue of the cession of any rights under any such agreement, there has accrued in any such year or period the right to have improvements effected on the land or to the buildings by any other person -(i)the amount stipulated in the agreement as the value of the improvements or as the amount to be expended on the improvements; or(ii)if no amount is so stipulated, an amount representing in the opinion of the Minister the fair and reasonable value of the improvements;(m)any amount received or accrued under or upon surrender or disposal of, or by way of any loan or advance granted by the insurer concerned under or upon the security of, any policy of insurance upon the life of any person who at any time while the policy was in force was an employee of the taxpayer or, where the taxpayer is a company, was a director or employee of the company, if any premium paid in respect of such policy is or was deductible from the income of the taxpayer, whether in the current or any previous year of assessment, under section 17, but -(i)where any amount received or accrued under or upon the surrender or disposal of any such policy falls to be included in the gross income of the taxpayer, the amount so included in his or her gross income is reduced by the amount of any loan or advance under or upon security of that policy which has been included in his or her gross income, whether in the current or any previous year of assessment; or(ii)where any such policy has been terminated by the insurer and a paid-up policy has been issued, the terminated policy and the paid-up policy is, for the purposes of this paragraph, deemed to be one and the same policy;[paragraph (m) substituted by Act 15 of 2011](n)any amount which in terms of any other provision of this Act is specifically required to be included in the taxpayer’s income, and for the purposes of this paragraph all amounts which in terms of subsection (4) of section 14 are required to be included in the taxpayer’s income shall be deemed to have been received by or to have accrued to the taxpayer from a source within Namibia notwithstanding that such amounts may have been recovered or recouped outside Namibia;(o)any amount received or accrued, whether in money or in kind, as consideration (or payment of like nature) or the open market value by way of a sale, donation, expropriation, cession, grant or other alienation or transfer of ownership of a mineral licence, or right to mine minerals in Namibia, and includes a sale, donation, expropriation, cession, grant or any other alienation or transfer of ownership of any share or member’s interest in a company that holds a mineral licence or mineral right whether directly, or indirectly, less the acquisition cost of the mineral licence or mineral right, but the acquisition cost of the licence or right may not create a loss;[paragraph (o) inserted by Act 15 of 2011 and substituted by Act 13 of 2015; the amendment markings in Act 13 of 2015 are incomplete](p)any amount (whether in money or in kind) received by or accrued to any person or company as compensation for any restraint of trade imposed on such person or company;[paragraph (p) is inserted by Act 13 of 2015](q)any amount received or accrued, whether in money or in kind, as consideration (or payment of like nature) or the open market value by way of a sale, donation, expropriation, cession, grant or other alienation or transfer of ownership of a petroleum licence, or right to mine petroleum in Namibia, and includes a sale, donation, expropriation, cession, grant or any other alienation or transfer of ownership of any share or member’s interest in a company that holds a petroleum licence or petroleum right, whether directly, or indirectly, less any -(i)acquisition costs and exploration expenditure relating to the petroleum licence or right; and(ii)costs of improving the value of the petroleum licence or right,but the acquisition costs, exploration expenditure and cost of improvement of the value of the licence or right may not create a loss.[Paragraph (q) is inserted by Act 13 of 2015. This paragraph should end with a semicpolon rather than a full stop.]“income” means the amount remaining of the gross income of any person for any year or period of assessment after deducting therefrom any amounts exempt from normal tax under Part 1 of Chapter II;“local authority” means the council of a municipality constituted or established in terms of the provisions of the Municipal Ordinance, 1963 (Ordinance 13 of 1963), a Village Management Board constituted in terms of the provisions of the Village Management Boards Ordinance, 1963 (Ordinance 14 of 1963) and the Peri-Urban Development Board established in terms of the provisions of the Peri-Urban Development Board Ordinance, 1970 (Ordinance 19 of 1970);“manufacturing activity” means -(a)the physical or chemical transformation of materials or components into new products -(i)whether manually or by mechanical or other process;(ii)whether in a factory, at a private dwelling or any other place; or(iii)whether for purposes of sale in the wholesale or in the retail trade; or(b)the assembly of the component parts of manufactured products, but excluding -(i)assembly on the site of prefabricated integral parts into bridges, water tanks, storage or warehouse facilities, railroad and elevated rights-of-way, lifts and escalators, plumbing, sprinklers, central heating, ventilating and air conditioning, lighting and electrical wiring, systems of building and all kinds of structures; and(ii)assembly and installation of machinery and equipment rendered as a service incidental to the sale of goods by a person primarily engaged in the wholesale or retail trade;[definition of “manufacturing activity” inserted by Act 7 of 2002, with this insertion coming into effect for a company at the beginning of the year of assessment of such company commencing on or after 1 January 2003 (section 1(2)(b) of Act 7 of 2002)]“married” includes a marriage by customary law and “spouse” shall be construed accordingly;[definition of “married” substituted by Act 25 of 1992]“married person” means any person who during any portion of the period in respect of which any assessment is made, was married or was a widower or widow but does not include any person who, although married, was during the whole of such period separated from his spouse under a judicial order or written agreement;[definition of “married person” substituted by AG 10 of 1985 as from the commencement of the years of assessment ending on or after 28 February 1986]“Master” means the Master or a Deputy Master of the High Court of Namibia appointed under section 2 of the Administration of Estates Act, 1965 (Act 66 of 1965);[definition of “Master” substituted by Act 12 of 1996][definition of “mining for gold” deleted by Act 25 of 1992]“mineral licence” means any mineral licence as defined in the Minerals (Prospecting and Mining) Act, 1992 (Act No 33 of 1992);[definition of “mineral licence” inserted by Act 13 of 2015]“mining operations” and “mining” include every method or process by which any mineral (excluding petroleum) is won from the soil or from any substance or constituent thereof;[definition of “mining operations” and “mining” amended by Act 3 of 1991]“Minister” means the Minister of Finance;[definition of “Minister” inserted by Act 25 of 1992]“Namibia” means the Republic of Namibia and, when used in geographical sense, includes the territorial sea as well as the exclusive economic zone and the continental shelf over which Namibia exercises sovereign rights in accordance with its national and international laws concerning the exploration and exploitation of the natural resources of the sea-bed and its subsoil and the superjacent waters as defined in sections 2, 4, and 6 of the Territorial Sea and Exclusive Economic Zone of Namibia Act, 1990 (Act No. 3 of 1990);[definition of “Namibia” inserted by Act 13 of 2015]“Namibian company” means any association, corporation, company or body corporate referred to in paragraph (a) of the definition of “company” or any assocation referred to in paragraph (d) of that definition or any unit portfolio referred to in paragraph (e) of that definition;[The definition of “Namibian company” is inserted by Act 25 of 1992. The word “association” is misspelt in the Government Gazette in its second use in this definition, as reproduced above.][definition of “natural oil” deleted by Act 3 of 1991]“nominal value” means -(a)in relation to shares issued by a company -(i)if the shares have a par value, such par value; or(ii)if the shares do not have a par value, an amount equal to the amount at which the par value of those shares would be determined if the company were to convert the shares into shares having a par value:Provided that in the case of capitalization shares the nominal value thereof at the time of the issue thereof shall be deemed to be the amount of the company’s reserves (including any share premium account) and unappropriated profits applied in paying up such shares as contemplated in the definition of “capitalization shares” in this section and the amount of such reserves applied in paying up any share premium in respect of the said shares; or(b)in relation to bonus debentures or securities issued by a company, the amount of the company’s reserves or unappropriated profits applied in paying up such debentures or securities as contemplated in the definition of “bonus debentures or securities” in this section;“notice of assessment” means a notice of assessment issued in terms of section 67(2);[definition of “notice of assessment” inserted by Act 7 of 2002]“pension fund” includes a pension scheme established by or under any law: Provided that the rules of such scheme, unless contained in such law, shall be subject to approval by the Minister and shall not be contrary paragraph (b), and any superannuation, widows’ and orphans’ fund and any other fund (other than a preservation fund, a provident fund or a retirement annuity fund) which is approved by the Minister in respect of the year of assessment in question: Provided further that the Minister may approve a fund subject to such limitations or conditions as he or she may determine, and shall not approve a fund in respect of any year of assessment unless he or she is in respect of that year of assessment satisfied -[The introductory portion of the definition of “pension fund” is amended by Act 25 of 1992 and by Act 21 of 1999 (amendment markings incomplete). The word “to” should be inserted into the phrase “shall not be contrary to paragraph (b)”.](a)that the fund is a permanent fund bona fide established for the purpose of providing annuities for employees on retirement from employment or for widows, children, dependants or nominees of deceased employees, or mainly for the said purpose and also for the purpose of providing benefits other than annuities for the persons aforesaid; and(aA)that the fund is registered in Namibia as a pension fund under the Pension Funds Act, 1956 (Act 24 of 1956); and[paragraph (aA) inserted by Act 17 of 1994](b)that the rules of the fund provide -(i)that all annual contributions of a recurrent nature to the fund shall be in accordance with specified scales;(ii)that membership of the fund throughout the period of employment shall be a condition of the employment by the employer of all persons of the class or classes specified therein who enter his employment on or after the date upon which the fund comes into operation;(iii)that persons who immediately prior to the said date were employed by the employer and who on the said date fall within the said class or classes may, on application made within a period of not more than twelve months as from the said date, be permitted to become members of the fund on such conditions as may be specified in the rules;(iv)that if -(aa)the total value of the annuity or annuities which an employee or other person referred to in paragraph (a) becomes entitled to exceeds N$50 000, not more than one-third of such annuity or annuities may be commuted for a single payment;(bb)the total value of the annuity or annuities which a person referred to in subparagraph (iv)(aa) becomes entitled to does not exceed N$50 000, the total of such annuity or annuities may be commuted for a single payment;(cc)the value of an existing annuity which any person is entitled to at the date of commencement of the Income Tax Amendment Act, 2010, does not exceed N$50 000, irrespective of whether any portion of such annuity has before such date in terms of any provision of this Act been commuted for a single payment, the total of such annuity may be commuted, at the request of such person, for a single payment;[Subparagraph (iv) is amended by Act 25 of 1992 and by Act 17 of 1994; substituted by Act 21 of 1999; and amended by Act 5 of 2010 with effect from 1 April 2010 (section 9(b) of Act 5 of 2010) and by Act 15 of 2011.](v)for the administration of the fund in such a manner as to preclude the employer from controlling the management or assets of the fund and from deriving any monetary advantage from moneys paid into or out of the fund, except that where the employer is a partnership, a member of the partnership may be permitted to derive such monetary advantage if he or she was previously an employee and, on becoming a partner, was permitted to retain his or her membership of the fund as though he or she had not ceased to be an employee, his or her contributions being based upon his or her pensionable emoluments during the twelve months which ended on the day on which he or she ceased to be an employee and his or her benefits from the fund being calculated accordingly; and[subparagraph (iv) amended by Act 21 of 1999](vi)that the Minister shall be notified of all amendments of the rules; and(c)that the rules of the fund have been complied with;“registered manufacturer” means a taxpayer registered as a manufacturer under section 5A;[The definition of “registered manufacturer” is inserted here as directed by Act 10 of 1993, but the resulting alphabetical order is incorrect. Act 10 of 1993 should have directed that the definition of “registered manufacturer” be inserted after the definition of “provident fund” rather than after the definition of “pension fund”.][The definition of “Permanent Secretary” is inserted by Act 12 of 1991 and deleted by Act 12 of 1996.]“person” includes any trust and the estate of a deceased person and such estate is deemed to have come into existance at the moment of death of the deceased person, and includes a partnership for purposes of sections 34A, 34B, 34C, 34D and 34E;[The definition of “person” is amended by Act 5 of 2007 with effect from 1 March 2009 (section 12(6) of Act 5 of 2007). It is substituted by Act 5 of 2010. The word “existence” is misspelt in the Government Gazette, as reproduced above.]“petroleum” means petroleum as defined in section 1 of the Petroleum (Exploration and Production) Act, 1991;[definition of “petroleum” inserted by Act 3 of 1991]“petroleum licence”, includes exploration licence, reconnaissance licence and production licence as defined in the Petroleum (Exploration and Production) Act, 1991 (Act No. 2 of 1991);[The definition of “petroleum licence” is inserted by Act 13 of 2015. The comma after the term “petroleum licence” is superfluous.]“prescribed” means prescribed or deemed to be prescribed by or under this Act;“preservation fund” means any fund (other than a pension fund, provident fund, benefit fund or retirement annuity fund) which is approved by the Minister in respect of the year of assessment in question: Provided that the Minister may approve a preservation fund subject to such limitations or conditions as he or she may determine, and shall not approve any preservation fund in respect of any year of assessment unless he or she is in respect of that year of assessment satisfied -(a)that the preservation fund is a permanent pension preservation fund or a permanent provident preservation fund, established bona fide and solely for the purposes of -(i)preserving so much of any amount derived by the taxpayer from any pension fund or provident fund as is invested in such preservation fund until such time that the invested amount can be transferred or paid to any pension fund, provident fund or retirement annuity fund, or withdrawn in one or more amounts for other purposes; and(ii)if any amount remains in such fund at the time of retirement of the taxpayer as provided for in the rules of such preservation fund, to provide for annuities or lump sum benefits for members on retirement, or for widows, children, dependants or nominees of deceased members, or mainly for such purposes, and also for the purpose of providing benefits other than annuities or lump sum benefits to such persons;(b)that the rules of the fund provide -(i)that contributions to the preservation fund only be made by way of the transfer or payment of so much of the members’ share in a pension fund or provident fund, as the case may be, as may be transferred or paid to the preservation fund within the year of assessment or within a further period of three months following such year of assessment, as the result of the termination of such member’s membership of such pension fund or provident fund, or on the cessation of such pension fund or provident fund, as the case may be;(ii)that if, in the case of a pension preservation fund -(aa)the total value of the annuity or annuities which a taxpayer referred to in paragraph (a)( i) becomes entitled to exceeds N$50 000, not more than one-third of the total value of such annuity or annuities may be commuted for a single payment;(bb)the total value of the annuity or annuities which a taxpayer referred to in paragraph (a)(i) becomes entitled to does not exceed N$50 000, the total of such annuity or annuities may be commuted for a single payment;(cc)a person dies after he or she has become entitled to an annuity, no further benefit other than an annuity or annuities shall be payable to such person’s spouse, children, dependants or nominees;[Subparagraph (ii) is amended by Act 5 of 2010 with effect from 1 April 2010 (section 9(b) of Act 5 of 2010).](iii)that a member shall be entitled to -(aa)withdraw, subject to the rules of the preservation fund, amounts from the member’s share of the preservation fund for a period not exceeding three years from the date on which the transfers or payments were made to the preservation fund in terms of subparagraph (i);(bb)transfer amounts from the member’s share of the preservation fund to any one or more pension funds, provident funds or retirement annuity funds;(cc)the commencement of the payment of retirement benefits to such member not earlier than on reaching the age of 55 years and not later than on reaching the age of 70 years, except in the case of a member who through infirmity of mind or body becomes permanently incapable of carrying on his or her occupation, in which case the payment of such retirement benefits shall commence on the date such member became so permanently incapable;(iv)for the administration of the preservation fund by a Board of Trustees appointed by the administrators of the preservation fund; and(v)that the Minister shall be notified of any amendment of the rules;(c)that the rules of the preservation fund have been complied with; and(d)that the preservation fund is registered in Namibia under the Pension Funds Act, 1956 (Act No. 24 of 1956);[The definition of “preservation fund” is inserted by Act 21 of 1999, with this insertion deemed to have come into force at the beginning of the year of assessment commencing on or after 1 March 1998 (section 1(2) of Act 21 of 1999).]“provident fund” means any fund (other than a pension fund, benefit fund or retirement annuity fund) which is approved by the Minister in respect of the year of assessment in question: Provided that the Minister may approve a fund subject to such limitations or conditions as he or she may determine, and shall not approve a fund in respect of any year of assessment unless he or she is in respect of that year of assessment satisfied -(a)that the fund is a permanent fund bona fide established solely for the purpose of providing benefits for employees on retirement from employment or solely for the purpose of providing benefits for the spouses, children, dependants or nominees of deceased employees or deceased former employees, or solely for a combination of such purposes;(aA)that the fund is registered in Namibia as a provident fund under the Pension Funds Act, 1956 (Act No. 24 of 1956);(b)that the rules of the fund contain provisions similar in all respects to those required to be contained in the rules of a pension fund in terms of subparagraphs (i), (ii), (iii), (v) and (vi) of paragraph (b) of the definition of “pension fund”; and(c)that the rules of the fund have been complied with;[The definition of “provident fund” is inserted by Act 25 of 1992 and amended by Act 21 of 1999, with this amendment deemed to have come into force at the beginning of the year of assessment commencing on or after 1 March 1998 (section 1(2) of Act 21 of 1999).]“regional council” means a regional council established under section 2 of the Regional Councils Act, 1992 (Act 22 of 1992);[The definition of “regional council” is inserted by Act 12 of 1996.][The definition of “registered manufacturer” should appear here. It is listed above, after the definition of “pension fund”, in accordance with the instructions in Act 10 of 1993.]“regulation” means a regulation in force under this Act;“relative” in relation to any person, means the spouse of such person or anybody related to him or his spouse within the third degree of consanguinity, or any spouse of anybody so related, and for the purpose of determining the relationship between any child and any other person, such child shall be deemed to be related to its adoptive parent within the first degree of consanguinity;“representative taxpayer” means -(a)in respect of the income of a company, the public officer thereof;(b)in respect of the income under his management, disposition or control, the agent of any person, including an agent appointed as such under the provisions of section 91, and for the purposes of this paragraph the term “agent” includes every person in Namibia having the receipt, management or control of income on behalf of any person permanently or temporarily absent from Namibia or remitting or paying income to or receiving moneys for such person;(c)in respect of income the subject of any trust or in respect of the income of any minor or mentally disordered or defective person or any other person under legal disability, the trustee, guardian, curator or other person entitled to the receipt, management, disposal or-control of such income or remitting or paying to or receiving moneys on behalf of such person under disability;(d)in respect of income paid under the decree or order of any court or judge to any receiver or other person, such receiver or person, whoever may be entitled to the benefit of such income, and whether or not it accrues to any person on a contingency or an uncertain event;(e)in respect of the income received by or accrued to any deceased person during his lifetime and the income received by or accrued to the estate of any deceased person, the executor or administrator of the estate of such deceased person,but nothing in this definition shall be construed as relieving any person from any liability, responsibility or duty imposed upon him by this Act;“retirement annuity fund” means any fund (other than a pension fund, provident fund or benefit fund) which is approved by the Minister in respect of the year of assessment in question: Provided that the Minister may approve a fund subject to such limitations or conditions as he may determine, and shall not approve any fund in respect of any year of assessment unless he is in respect of that year of assessment satisfied -(a)that the fund is a permanent fund bona fide established solely for the purpose of providing life annuities for the members of the fund or annuities for the spouses, children, dependants or nominees of deceased members; and[paragraph (a) amended by Act 25 of 1992](b)that the rules of the fund provide -(i)for periodical contributions by the members or contributions made by way of transfer of members’ interests in approved pension funds, provident funds or other retirement annuity funds;(ii)that not more than one-third of the total value of any annuities to which any person becomes entitled, may be commuted for a single payment, except where such total value does not exceed N$50 000;[Subparagraph (ii) is amended by Act 25 of 1992, Act 22 of 1995, Act 7 of 2002 and Act 5 of 2010 with effect from 1 April 2010 (section 9(b) of Act 5 of 2010).](iii)that no portion of any annuity payable to the spouse, child, dependant or nominee of a deceased member may be commuted later than six months from the date of the death of such member;[subparagraph (iii) amended by Act 25 of 1992](iv)adequate security to safeguard the interests of persons who may become entitled to annuities;(v)that no member shall become entitled to the payment of any annuity after he reaches the age of seventy years or; except in the case of a member who becomes permanently incapable through infirmity of mind or body of carrying on his occupation, before he reaches the age of fifty-five years;(vi)that where a member dies before he or she becomes entitled to the payment of an annuity, the benefits shall not exceed a refund to his or her estate or to his or her spouse, children, dependants or nominees of the sum of the amounts (with or without reasonable interest thereon) contributed by him or her and an annuity or annuities to his or her spouse, children, dependants or nominees;[subparagraph (vi) amended by Act 25 of 1992](vii)that where a member dies after he or she has become entitled to an annuity no further benefit shall be payable other than an annuity or annuities to his or her spouse, children, dependants or nominees;[subparagraph (vii) amended by Act 25 of 1992](viii)that a member who discontinues his contributions prematurely shall be entitled either to an annuity (payable from the date on which he would have become entitled to the payment of an annuity if he had continued his contributions) determined in relation to his actual contributions or to be reinstated as a full member under conditions prescribed in the rules of the fund;(ix)that upon the winding-up of the fund a member’s interest therein must either be used to purchase a policy of insurance which the Minister is satisfied provides benefits similar to those provided by such fund or be paid for the member’s benefit into another approved retirement annuity fund;(x)that save as is contemplated in subparagraph (ii), no member’s rights to benefits shall be capable of surrender, commutation or assignment or of being pledged as security for any loan;(xi)that the Minister shall be notified on all amendments of the rules; and(c)that the rules of the fund have been complied with;(d)that the retirement annuity fund is registered in Namibia under the Pension Funds Act, 1956 (Act No. 24 of 1956);[paragraph (d) inserted by Act 7 of 2011]“right”, in relation to paragraph (o) or paragraph (q) of the definition of “gross income”, means a contingent right to any licence or share or member’s interest contemplated in paragraph (o) or paragraph (q) of that definition, held by a trust, the acquisition of which is -(a)a consequence of or attendant upon the conclusion of any agreement for consideration with regard to a licence held by such trust;(b)accompanied by the substitution or variation of the loan creditor of such trust; or(c)accompanied by the change of any trustee of such trust;[definition of “right” inserted by Act 13 of 2015]“scientific research” means any activity in the field of natural or applied science for the extension of knowledge;[definition of “Secretary” deleted by Act 12 of 1991]“shareholder” -(a)in relation to any company referred to in paragraph (a), (b), (c) or (d) of the definition of “company” in this section, means the registered shareholder in respect of any share, except that where some person other than the registered shareholder is entitled, whether by virtue of any provision in the memorandum or articles of association of the company or under the terms of any agreement or contract, or otherwise, to all or part of the benefit of the rights of participation in the profits or income attaching to the share so registered, such other person shall, to the extent that he is entitled to such benefit, also be deemed to be a shareholder; or(b)in relation to any company referred to in paragraph (e) of the said definition, the registered holder of any unit certificate issued in respect of a unit included in the relevant unit portfolio, except that where some person other than the registered holder of any unit is entitled, whether by virtue of any provision in the trust deed entered into for the purposes of the relevant unit trust scheme or under the terms of any agreement or contract, or otherwise, to all or part of the benefit of the rights of participation in the profits or income attaching to the unit certificate, such other person shall, to the extent that he is entitled to such benefit, also be deemed to be a shareholder;[definition of “South West African company” deleted by Act 25 of 1992]“specified date”, in relation to a year of assessment of any company, means the last day of such year of assessment;“specified period”, in relation to a year of assessment of any company means -(a)where such year of assessment is the first financial year of such company, the period commencing on the first day of such year and ending six months after the specified date in respect of such year; and(b)where such year of assessment is a subsequent financial year of such company, the period commencing the day after the end of the specified period in respect of the immediately preceding year of assessment and ending six months after the specified date in respect of the year of assessment in question:Provided that where by any reason of the amalgamation under section 94 of the Co-operative Societies Ordinance, 1946 (Ordinance 15 of 1946), of two or more agricultural co-operatives (as defined in section 31(4) of this Act), the assets and liabilities of such co-operatives have vested in a new agricultural co-operative (as so defined), the Minister may, having regard to the circumstances of the case, direct that the specified period of each of the co-operatives which have so amalgamated, as applicable in relation to the final year of assessment of the co-operative in question be extended so as to end on such day as the Minister may determine;“tax” or “the tax” or “taxation” means any levy or tax leviable under this Act; and for the purposes of Part IV of Chapter III includes any levy or tax leviable under any previous income tax law;“taxable amount”, in relation to a person other than a company, means the taxable income of such person;[definition of “taxable amount” substituted by Act 22 of 1995]“taxable income” means the amount remaining after deducting from the income of a person all the amounts allowed under Part I of Chapter II to be deducted from or set off against such income;[definition of “taxable income” substituted by Act 22 of 1995 and amended by Act 12 of 1996]“taxpayer” means any person chargeable with any tax leviable under this Act and, for the purposes of any provision relating to any return, includes every person required by this act to furnish such return and for the purposes of Part IV of Chapter III includes any person chargeable with any tax leviable under any previous income tax law;[definition of “territory” deleted by Act 12 of 1991]“this Act” includes the regulations;“trade” includes every profession, trade, business, employment, calling, occupation or venture, including the letting of any property, and the use of or the grant of permission to use any patent or design as defined in the Patents and Designs Proclamation, 1923 (Proclamation 17 of 1923), or any trade mark as defined in the Trade Marks in South West Africa Act, 1973 (Act 48 of 1973), or any copyright as defined in the Copyright Act, 1965 (Act 63 of 1965), or any other property which in the opinion of the Minister is of a similar nature;[The Patents and Designs Proclamation 17 of 1923 will be replaced by the Industrial Property Act 1 of 2012, which has not yet been brought into force. The Copyright Act 63 of 1965 has been replaced by the Copyright and Neighbouring Rights Protection Act 6 of 1994.]“trading stock” includes anything produced, manufactured, purchased or in any other manner acquired by a taxpayer for purposes of manufacture, sale or exchange by him or on his behalf, or the proceeds from the disposal of which forms, or will form, part of his gross income;“trustee” in addition to every person appointed or constituted as such by act of parties, by will, by order or declaration of court or by operation of law, includes an executor or administrator, tutor or curator, and any person having the administration or control of any property subject to a trust, usufruct, fidei-commissum or other limited interest, or acting in any fiduciary capacity or having, either in a private or an official capacity, the possession, direction, control or management of any property of any person under legal disability;“year of assessment” means any year or other period in respect of which any tax or duty leviable under this Act is chargeable.[Act 5 of 1982 (Rehoboth) provides the following additional definitions relevant to the application of this Act to “citizens of Rehoboth” “Chief Director” means the officer at the head of the government service of Rehoboth; “citizen of Rehoboth” means a citizen of Rehoboth as contemplated in section 5of the Rehoboth Self-Government Act, 1976 (Act 56of 1976), irrespective of whether such citizen is resident within Rehoboth or elsewhere in the territory of South West Africa; “Rehoboth” means the area defined in section 6 of the Rehoboth Self-Government Act, 1976 (Act 56of 1976).]

Chapter I
Administration

2. Administration of the Act

The Minister shall be responsible for carrying out the provisions of this Act.[section 2 amended by Act 12 of 1996]

3. Exercise of powers and performance of duties

(1)The powers conferred and the duties imposed upon the Minister by or under the provisions of this Act or any amendment thereof may be exercised or performed by the Minister personally, or by any officer or employee carrying out the said provisions under the control, direction or supervision of the Minister.

(2)Any decision made and any notice or communication issued or signed by any such officer or employee may be withdrawn or amended by the Minister or by the officer or employee concerned, and shall for the purposes of the said provisions, until it has been so withdrawn, be deemed to have been made, issued or signed by the Minister: Provided that a decision made by any such officer or employee in the exercise of any discretionary power under the provisions of this Act or of any previous income tax law shall not be withdrawn or amended after the expiration of two years from the date of the written notification of such decision or of the notice of assessment giving effect thereto, if all the material facts were known to the said officer or employee when he made his decision.

(3)Any written decision made by the Minister personally in the exercise of any discretionary power under the provisions of this Act or of any previous income tax law shall not be withdrawn or amended by the Minister if all the material facts were known to him when he made his decision.

4. Preservation of secrecy

(1)Every person employed in carrying out the provisions of this Act shall preserve and aid in preserving secrecy with regard to all matters that may come to his knowledge in the performance of his duties in connection with those provisions, and shall not communicate any such matter to any person whatsoever other than the taxpayer concerned or his lawful representative nor suffer or permit any such person to have access to any records in the possession or custody of the Minister except in the performance of his duties under this Act or by order of a competent court: Provided that -

(a)any information obtained by the Minister in the performance of his duties under the provisions of this Act or any previous income tax law may be used by him for the purposes of the performance of his duties in terms of the provisions of any other fiscal law administered by him; and

(b)the Auditor-General shall in the performance of his duties in terms of the provisions of any law have access to documents in the possession or custody of the Minister.

(2)

(a)Every person so employed shall, before acting under this Act, take and subscribe before a magistrate or justice of the peace, or an officer or employee of the Department of Finance who is a commissioner of oaths, such oath of fidelity or secrecy as may be prescribed.

(b)Any oath of fidelity or secrecy taken and subscribed under the provisions of any previous income tax law by any person who is employed in connection with carrying out the provisions of this Act shall be deemed to be an oath taken and subscribed in terms of this subsection.

(3)Every person who in contravention of the provisions of this section or of the true intent of the oath of fidelity or secrecy taken by him, and without lawful excuse, reveals any matter or thing which has come to his knowledge in the course of his official duties to any person whatsoever or suffers or permits any person to have access to any records in the possession or custody of the Minister, shall be guilty of an offence and liable on conviction to imprisonment for a period not exceeding two years.

(4)Any person who takes up employment as contemplated in subsection (1) before taking the prescribed oath shall be guilty of an offence and liable on conviction to a fine not exceeding one hundred rand.

Chapter II
The taxes

Part I – Normal tax

5. Levy of normal tax for the benefit of the State Revenue Fund and transfer of a part thereof to the revenue funds of representative authorities

(1)

(a)Subject to the provisions of Schedule 2 there shall be paid annually for the benefit of the State Revenue Fund, an income tax (in this Act referred to as the normal tax) in respect of the taxable income received by or accrued to or in favour of -

(i)any person other than a company during the year of assessment ending on the last day of February, 1982, and every succeeding year of assessment; and

(ii)any company during every financial year thereof ending on or after 1 March 1982.

(b)[Act 5 of 1982 (Rehoboth) deleted paragraph (b) for the purpose of “the application of the Act and any amendment thereof to citizens of Rehoboth”. Paragraph (b) was generally deleted by AG 25 of 1989.]

(2)Subject to the provisions of this Act with regard to the calculation of tax, the normal tax payable in respect of the taxable income of any person (other than a company) for any year of assessment shall be calculated on the taxable amount of such person for such year.

(3)For the purpose only of determining the rate of normal tax payable by a person (other than a company) whose income for the year of assessment includes an amount referred to in paragraph (d) or (dB)(ii) or (iii) or (dD)(i) or (iii) of the definition of “gross income” in section 1, there shall be deducted from the person’s income for that year of assessment the amount so included, but in no case shall the rate of normal tax be less than that applicable to the first N$ of taxable amount on which tax becomes payable in terms of paragraph 1 of Schedule 4, and this subsection shall not be construed as relieving a person from liability for taxation upon any portion of the person’s taxable income.[Subsection (3) is amended by Act 25 of 1992, Act 10 of 1993 and Act 17 of 1994 with effect from the beginning of the year of assessment which commenced on or after 1 March 1993 (section 2(2) of Act 17 of 1994). It is also amended by Act 22 of 1995, with this amendment deemed to have come into force (a) in the case of a taxpayer other than a company, at the beginning of the year of assessment commencing on or after 1 March 1994, and (b) in the case of a taxpayer which is a company, at the beginning of the year of assessment of such company on or after 1 January 1994 (section 2(2) of Act 22 of 1995). It is then substituted by Act 12 of 1996. It is amended by Act 21 of 1999, with this amendment deemed to have come into force at the beginning of the year of assessment commencing on or after 1 March 1998 (section 2(2) of Act 21 of 1999). It is again substituted by Act 7 of 2002.]

(4)[Subsection (4) is deleted by Act 3 of 1991 and inserted by Act 17 of 1994 with effect from the beginning of the year of assessment which commenced on or after 1 March 1993 (section 2(2) of Act 17 of 1994). It is amended by Act 22 of 1995, with this amendment deemed to have come into force (a) in the case of a taxpayer other than a company, at the beginning of the year of assessment commencing on or after 1 March 1994, and (b) in the case of a taxpayer which is a company, at the beginning of the year of assessment of such company on or after 1 January 1994 (section 2(2) of Act 22 of 1995). It is then deleted by Act 7 of 2002.]

(5)[Subsection (5) is amended by Act 25 of 1992, deleted by Act 10 of 1993 and inserted by Act 17 of 1994 with effect from the beginning of the year of assessment which commenced on or after 1 March 1993 (section 2(2) of Act 17 of 1994). It is substituted by Act 22 of 1995, with this amendment deemed to have come into force (a) in the case of a taxpayer other than a company, at the beginning of the year of assessment commencing on or after 1 March 1994, and (b) in the case of a taxpayer which is a company, at the beginning of the year of assessment of such company on or after 1 January 1994 (section 2(2) of Act 22 of 1985). It is deleted by Act 7 of 2002.]

5A. ***

[section 5A inserted by Act 10 of 1993, substituted by Act 12 of 1996 and by Act 7 of 2002 and repealed by section 1(1) of Act 2 of 2020 on 31 December 2020]

5B. Special abatement in respect of manufacturers

[Section 5B is inserted by Act 10 of 1993, substituted by Act 22 of 1995 and deleted by Act 12 of 1996.]

6. Rates of normal tax

The rates of normal tax chargeable in respect of taxable income referred to in section 5(1) shall be as set out in Schedule 4.[Section 6 is amended by Act 12 of 1982 (with some of these amendments deemed to have come into force on 1 March 1982 and some coming into force from the beginning of the financial year of a company that ends on or after 1 June 1982). Section 6 is also amended by AG 10 of 1985, with this amendment deemed to have come into operation from the beginning of the financial year of a company ending on or after 1 January 1984, and by Act 13 of 1985, Act 11 of 1986, Act 8 of 1987 and Act 12 of 1991. Section 6 is then substituted by Act 25 of 1992.]

7. ***

[Act 5 of 1982 (Rehoboth) added a proviso to section 7(4) for the purpose of “the application of the Act and any amendment thereof to citizens of Rehoboth”. Section 7 is amended generally by AG 10 of 1985, Act 8 of 1987 and Act 12 of 1991; substituted by Act 25 of 1992; amended by Act 10 of 1993 and by Act 17 of 1994; and deleted by Act 22 of 1995.]

8. Rebate in respect of any taxes on dividends payable to the government of any country other than Namibia

There shall be deducted from the normal tax payable by any person in whose taxable income there is included any amount received by or accrued to him or in his favour in respect of any dividends referred to in the proviso to paragraph (i) of the definition of “gross income” in section 1, the sum of any taxes proved to the satisfaction of the Minister to be payable, without any right of recovery, by such person to the government of any country other than Namibia in respect of such dividends: Provided that the rebate under this section shall not exceed so much of the normal tax payable by the taxpayer as the Minister determines to be attributable to the inclusion in his taxable income of the said amount.

9. Rebate in respect of non-resident shareholders’ tax

There shall be deducted from the normal tax payable by any person in whose taxable income there is included any dividend in respect of which non-resident shareholders’ tax has been paid in terms of this Act, so much of the normal tax as the Minister determines to be attributable to the inclusion in such person’s taxable income of taxable income from such dividend.

10. Rebate in respect of foreign income taxes on royalties and similar income

There shall be deducted from the normal tax payable by any person, in whose taxable income there is included any amount received by or accrued to him in respect of the use or right of use in any country other than Namibia or the grant of permission to use in such other country any patent or any design as defined in the Patents and Designs Proclamation, 1923 (Proclamation 17 of 1923), or any trade mark as defined in the Trade Marks in South West Africa Act, 1973 (Act 48 of 1973), or any copyright as defined in the Copyright Act, 1965 (Act 63 of 1965), or any model, pattern, plan, formula or process, or any other property or right of a similar nature, or any motion picture film, or any film or video tape or disc for use in connection with television, or any sound recording or advertising matter used or intended to be used in connection with such motion picture film, film, video tape or disc, the sum of any taxes on income proved to the satisfaction of the Minister to be payable, without any right of recovery, by such person to the government of any country other than Namibia in respect of the said amount: Provided that the rebate under this section shall not exceed so much of the normal tax payable by the taxpayer as the Minister determines to be attributable to the inclusion in his taxable income of the said amount.[The Patents and Designs Proclamation 17 of 1923 will be replaced by the Industrial Property Act 1 of 2012, which has not yet been brought into force. The Copyright Act 63 of 1965 has been replaced by the Copyright and Neighbouring Rights Protection Act 6 of 1994.]

11. Rebate in respect of diamond profits tax

There shall be deducted from the normal tax payable by any person in respect of taxable income derived from mining for diamonds any amount assessed in respect of any period coinciding with or forming part of the year of assessment as tax payable by such person under the provisions of section 4 of the Diamond Taxation Proclamation, 1941 (Proclamation 16 of 1941): Provided that the rebate under this section shall not exceed so much of the normal tax payable by the taxpayer as the Minister determines to be attributable to the inclusion in his taxable income of the said amount.

12. When income is deemed to have accrued or to have been received

(1)Income shall be deemed to have accrued to a person notwithstanding that such income has been invested, accumulated or otherwise capitalized by him or that such income has not been actually paid over to him but remains due and payable to him or has been credited in account or reinvested or accumulated or capitalized or otherwise dealt with in his name or on his behalf, and a complete statement of all such income shall be included by any person in the returns rendered by him under this Act.

(2)[subsection (2) deleted by Act 25 of 1992]

(3)Income shall be deemed to have been received by the parent of any minor child, if by reason of any donation, settlement or other disposition made by that parent of that child -

(a)it has been received by or has accrued to or in favour of that child or has been expended for the maintenance, education or benefit of that child; or

(b)it has been accumulated for the benefit of that child:

Provided that if both the parents had contributed to such donation, settlement or other disposition, such income shall be deemed to have been received by the parents in the same ratio as the amounts of their respective contributions bear to the whole amount of such donation, settlement or other disposition.[Subsection (3) is amended by Act 25 of 1992 to add the proviso. A colon has accordingly been added at the end of paragraph (b).]

(4)Any income received by or accrued to or in favour of any minor child of any person, by reason of any donation, settlement or other disposition made by any other person, shall be deemed to be the income of the parent of such minor child, if such parent has made a donation, settlement or other disposition or given some other consideration in favour directly or indirectly of the said other person or his or her family: Provided that if both the parents had contributed to such donation, settlement or other disposition or consideration in favour of such other person or his or her family, such income shall be deemed to have been received by the parents in the same ratio as the amounts of their respective contributions bear to the whole amount of such donation, settlement or other disposition or consideration in favour of such other person or his or her family.[subsection (4) amended by Act 25 of 1992]

(5)If any person has made any donation, settlement or other disposition which is subject to a stipulation or condition, whether made or imposed by such person or anybody else, to the effect that the beneficiaries thereof or some of them shall not receive the income or some portion of the income thereunder until the happening of some event, whether fixed or contingent, so much of any income as would, but for such stipulation or condition, in consequence of the donation, settlement or other disposition be received by or accrued to or in favour of the beneficiaries, shall, until the happening of that event or the death of that person, whichever first takes place, be deemed to be the income of that person.

(6)If any deed of donation, settlement or other disposition contains any stipulation that the right to receive any income thereby conferred may, under powers retained by the person by whom that right is conferred, be revoked or conferred upon another so much of any income as in consequence of the donation, settlement or other disposition is received by or accrues to or in favour of the person on whom that right is conferred, shall be deemed to be the income of the person by whom it is conferred, so long as he retains those powers.

(7)An amount received by or accrued to or in favour of any person from a provident fund by reason of the death of a member of such a fund shall be deemed to have accrued to the estate of the deceased member.[subsection (7) inserted by Act 25 of 1992]

13. Date of receipt or accrual of antedated salaries or pensions and of certain retirement gratuities

(1)For the purposes of this section -“antedated salary or pension” means an amount of salary or pension which has become payable to any person under a permanent grant, made with retrospective effect, of a salary or pension or of an increase in a salary or pension, and which in terms of such grant is payable in respect of a period ending on or before the date on which the grant has become effective;“pension” means an annuity payable under any law or under the rules of a pension fund or provident fund or by an employer to a former employee of that employer or to the widow, child or dependant of a deceased person who was employed by such employer;“salary” means salary, wages or similar remuneration payable by an employer to an employee. but does not include any bonus or any amount referred to in subsection (3).

(2)Where any antedated salary or pension has been received by or has accrued to any person during any year or period of assessment and the period in respect of which such antedated salary or pension has become payable (hereinafter referred to as the accrual period) commenced before the commencement of the said year or period of assessment, such antedated salary or pension shall at the option of the taxpayer be deemed -

(a)if the accrual period commenced not more than two years before the commencement of the said year or period of assessment, to have been received by or to have accrued to the said person in part during each of the years or periods of assessment in which any portion of the accrual period falls (the part of the said amount relating to any such year or period of assessment being determined on the basis of a reasonable apportionment of the whole of the said amount between all the said years or periods of assessment); or

(b)if the accrual period commenced more than two years before the commencement of the first-mentioned year or period of assessment, to have been received by or to have accrued to the said person in three equal annual instalments (the first and second instalments two years and one year respectively before the date on which the said amount accrued to the said person and the third instalment on the said date).

(3)Any amount received by or accrued to an employee or the holder of any office by way of bonus, gratuity or compensation upon or because of the termination of his services or because of the impending termination of his services within five years (or such longer period as the Minister may approve) from the date of receipt or accrual of such amount (less so much thereof as is exempt from tax under section 16(1)(o)), shall at the option of the taxpayer be deemed to have been received or to have accrued in three successive equal annual instalments of which the first shall be deemed to have been received or to have accrued on the date of receipt or accrual of such amount and each of the other two on an appropriate anniversary of that date, if -

(a)the termination or impending termination of the services of such employee or office holder is due to superannuation, ill-health or other infirmity; or

(b)the Minister is satisfied that the circumstances of the case warrant this concession.

14. Certain amounts to be included in income or taxable income

(1)So much of any amount which has been paid by any person as an allowance or advance to a director, manager, employee or other person in respect of expenses of travelling, entertainment or other service, as the Minister is not satisfied was actually expended by the recipient on such travelling or entertainment or in the performance of such service, shall be deemed to be part of the taxable income of the recipient.

(2)If, prior to 1 January 1974 any company awarded any capitalization shares the nominal value of which in terms of paragraph (g) or (h) of the definition of “dividend” in section 1 did not wholly rank as a dividend, and, within the period of ten years from the date of such award, any cash or any asset is given to any shareholder of that company in consequence of the liquidation or reconstruction of the company or the partial reduction of its share capital, there shall, subject to the provisions of subsection (3), be included in the taxable income of the company -

(a)In the case of the reconstruction of the company or the partial reduction of its share capital, an amount equal to the sum of the amount of any such cash and the value of any such asset; and

(b)in the case of the liquidation of the company-

(i)if the Minister is satisfied that such liquidation is bona fide and was not brought about solely or mainly for the purpose of avoiding liability for tax under this subsection, the amount by which the sum of all the amounts of any such cash and the value of all such assets so given to shareholders exceeds the sum of the paid-up capital of the company and the amount (if any) standing to the credit of the share premium account of the company immediately prior to the commencement of the liquidation of the company; or

(ii)if the Minister is not so satisfied, an amount determined as provided in paragraph (a):

Provided that the amounts included in the company’s taxable income under this subsection shall not in total exceed so much of the nominal value of such capitalization shares as did not rank as a dividend as aforesaid, less any amount paid up on such shares by the application of the company’s share premium account: Provided further that so much of the sum of the amount of any cash and the value of any asset so given to any shareholder of the company as by virtue of the provisions of the definition of “dividend” in section 1 constitutes a dividend in the hands of such shareholder, shall not be included in the company’s taxable income under this subsection.

(3)

(a)The provisions of subsection (2) shall not apply where any cash or asset referred to therein is given -

(i)in respect of any class of redeemable share capital issued before the first day of July, 1957, in pursuance of special provisions prescribed before that date for the repayment of such capital; or

(ii)in respect of any class of redeemable share capital issued on or after the first day of July, 1957, for the repayment of which special provisions are contained in the memorandum and articles of association of the company, if the holders of the equity share capital of the company were not either at the time of the award of such capitalization shares or at any time thereafter shareholders in that class of redeemable share capital.

(b)For the purposes of subsection (2) “paid-up capital” means the nominal value of the paid-up capital, excluding so much of the nominal value of any capitalization shares as did not rank as a dividend in terms of paragraph (g) or (h) of the definition of “dividend” in section 1 or the corresponding provisions of any previous income tax law.

(c)The decision of the Minister in the exercise of his discretion under subsection (2) shall be subject to objection and appeal.

(4)There must be included in the income of the taxpayer all amounts allowed to be deducted or set off under subsection (1) and sections 17 to 21, inclusive, except sections 17(1)(n), (q), (qA) and (s) and section 18(1)(a), or under the corresponding provisions of any previous income tax law, whether in the current or any previous year of assessment, which have been recovered or recouped during the current year of assessment, including recovery or recoupment by means of -

(a)the disposal or withdrawal from trade for use for non-trade purposes; or

(b)the removal from Namibia of any item in respect of which deductions were allowed against the income from the trade of such taxpayer in respect of such item,

but any item so disposed of, withdrawn from trade or removed from Namibia is valued at market value for the purpose of calculating the amount of any deduction recouped or recovered.[Subsection (4) is amended by Act 12 of 1996. It is also amended by Act 5 of 1997, with this amendment deemed to have come into force (a) in the case of any taxpayer other than a company, at the beginning of the year of assessment commencing on or after 1 March 1998; and (b) in the case of any taxpayer which is a company, at the beginning of the year of assessment commencing on or after 1 January 1998 (section 12(b) of Act 5 of 1997). It is further amended by Act 21 of 1999, with this amendment deemed to have come into force (a) in the case of any taxpayer other than a company, at the beginning of the year of assessment commencing on or after 1 March 1998; and (b) in the case of any taxpayer which is a company, at the beginning of the year of assessment of such company commencing on or after 1 January 1998 (section 3(2) of Act 21 of 1999). It is also amended by Act 7 of 2002 (amendment markings incomplete) and by Act 4 of 2005, with this amendment deemed to have come into force on 1 March 2004 (section 8(2) of Act 4 of 2005). It is further amended by Act 5 of 2007 with effect from the beginning of the year of assessment commencing on or after 1 March 2007 (section 12(3) of Act 5 of 2007) (amendment markings incomplete). It is then substituted by Act 15 of 2011.]

(5)

(a)Any amount which has been paid, whether in the form of rent or otherwise, by any person for the right of use or occupation of any movable or immovable property and has been allowed as a deduction in the determination of such person’s taxable income, and which or the equivalent of which is upon the subsequent acquisition of such property by that or any other person applied in reduction or towards settlement of the purchase price of such property, shall be included in the income of the person by whom the property is acquired as aforesaid for the year of assessment in which such person exercises the option or concludes the agreement, as the case may be, in consequence of which the property is acquired by him.

(b)Where any amount has been paid by any person for the right of use or occupation of any property which is thereafter acquired by that or any other person for a consideration which in the opinion of the Minister is not an adequate consideration, it shall for the purposes of paragraph (a) be deemed, unless the Minister, having regard to the circumstances of the case otherwise decides, that the said amount, or so much thereof as does not exceed the difference between the fair market value of such property as determined by the Minister and the amount of the consideration for which it has been acquired as aforesaid, has been applied in reduction or towards settlement of the purchase price of such property.

(c)Any decision of the Minister under paragraph (b) shall be subject to objection and appeal.

(6)So much of any amount which has been withdrawn by the taxpayer from a preservation fund and which has not been paid or transferred into any pension fund, provident fund or retirement annuity fund, shall be included in the taxable income of such taxpayer in the year of assessment in which the taxpayer’s benefit from a pension fund or provident fund was exempted from the tax due to the transfer or payment thereof into such preservation fund.[subsection (6) inserted by Act 21 of 1999]

15. Circumstances in which amounts deemed to have accrued from sources within Namibia

(1)An amount shall be deemed to have accrued to any person from a source within Namibia if it has been received by or has accrued to or in favour of such person by virtue of -

(a)any contract made by him within Namibia for the sale of goods, whether such goods have been delivered or are to be delivered in or out of Namibia;

(b)the use or right of use in Namibia, or the grant of permission to use in Namibia -

(i)any patent or design as defined in the Patents and Designs Proclamation, 1923 (Proclamation 17 of 1923), or any trade mark as defined in the Trade Marks in South West Africa Act, 1973 (Act 48 of 1973), or any copyright defined in the Copyright Act, 1965 (Act 63 of 1965), or any model, pattern, plan, formula or process or any other property or right of a similar nature; or

(ii)any motion picture film, or any film or video tape or disc for use in connection with television, or any sound recording or advertising matter used or intended to be used in connection with such motion picture film, film or video tape or disc,

wheresoever such patent, design, trade mark, copyright, model, pattern, plan, formula, process, property, right, motion picture film, film, video tape or disc, sound recording or advertising matter has been produced or made or such right of use or permission has been granted or payment for such use, right of use or grant of permission has been made or is to be made and whether such payment has been made or is to be made by a person resident in or outside Namibia: Provided that the provisions of this paragraph shall not apply in respect of any amount which is received by or accrued to any person (other than a company) who is not ordinarily resident in Namibia, or to any external company, in respect of the use (otherwise than for advertising purposes in connection with any motion picture film or otherwise than in connection with television) in any printed publication of any copyright as aforesaid;[The Patents and Designs Proclamation 17 of 1923 will be replaced by the Industrial Property Act 1 of 2012, which has not yet been brought into force. The Copyright Act 63 of 1965 has been replaced by the Copyright and Neighbouring Rights Protection Act 6 of 1994.]

(c)the imparting of or the undertaking to impart any scientific, technical, industrial or commercial knowledge or information for use in Namibia, or the rendering of or the undertaking to render, any assistance or service in connection with the application or utilisation of such knowledge or information, wheresoever such knowledge or information has been obtained or such knowledge or information has been imparted or is to be imparted or such assistance or service has been rendered or is to be rendered or any such undertaking has been given, and whether payment for such knowledge, information, assistance, service or undertaking has been made or is to be made by a person resident in or out of Namibia;

(d)any business carried on by any such person who is ordinarily resident in Namibia or in the case of a company is a domestic company, as owner or charterer of any ship or aircraft, or the disposal by such person of any commodity acquired in connection with the operation of such ship or aircraft, wheresoever such ship or aircraft may be operated or such disposal of the commodity may be effected;

(e)any service rendered or work or labour done by such person in the carrying on in Namibia of any trade, whether the payment for such service or work or labour is or is to be made by a person resident in or out of Namibia and wheresoever payment for such service or work or labour is or is to be made;

(f)any service rendered or work or labour done by such person outside Namibia, during any temporary absence of such person from Namibia, if such person is ordinarily resident in Namibia and such service is rendered or such work or labour is done for or on behalf of any employer by whom such person is employed in Namibia, whether the payment for such service or work or labour is or is to be made by a person resident in or out of Namibia and wheresoever payment for such service or work or labour is or is to be made;

(g)any services rendered by such person to, or work or labour done by such person for or on behalf of, the Government of Namibia or a regional council or any local authority in Namibia, notwithstanding that such services are rendered or that such work or labour is done outside Namibia: Provided that such services are rendered or such work or labour is done in accordance with a contract of employment entered into with such Government, regional council or local authority: Provided further that nothing in this paragraph shall be construed as imposing liability for taxation under this Act upon any salary or emolument paid to any person in the employment of the Government of Namibia in respect of any period for which such person is stationed in the Republic of South Africa;[paragraph (g) amended by Act 12 of 1996]

(h)any services rendered or work or labour done by any such person who is ordinarily resident in Namibia, as an officer or a member of the crew of any ship or aircraft, notwithstanding that such services are rendered or such work or labour is done outside Namibia and wheresoever payment for such services or work or labour is made or is to be made;

(i)any pension or annuity granted to such person, wheresoever payment of that pension or annuity is made and wheresoever the funds from which payment is made are situate, by -

(i)the Government of Namibia, or by any regional council or local authority in Namibia; or

(ii)the Government of the Republic of South Africa, including the Railway Administration, if any portion of the services in respect of which that pension or annuity was granted, was performed within Namibia; or

(iii)any person whether residing or carrying on business in Namibia or not, if the services in respect of which that pension or annuity was granted were performed within Namibia for at least two years during the ten years immediately preceding the date from which the pension or annuity first became due:

Provided that if the pension or annuity was granted in respect of services which were rendered partly within and partly outside Namibia, only so much of such pension or annuity as bears to the amount of such pension or annuity the same ratio as the period during which the services were rendered in Namibia bears to the total period during which the services were rendered, shall be deemed to be derived from a source within Namibia.

[paragraph (i) amended by Act 12 of 1996]

(2)Any interest which has been received by or has accrued to any domestic company or any person who is ordinarily resident in Namibia in respect of any loan, deposit, advance, participation bond, debenture or interest-bearing security, or any dividend distributed by any building society which has been received by or has accrued to any such domestic company or person, shall be deemed to have been derived from a source within Namibia, wheresoever such loan, deposit or advance is made or held or participation bond is registered or debenture, interest-bearing security or any share to which such dividend or share of profits relates is subscribed for or issued or held or such interest or dividend is payable.[subsection (2) amended by Act 8 of 1987 and by Act 12 of 1991 (amendment markings incomplete)]

(3)Any annuity which has in respect of any purchased annuity contract as contemplated in section 16B been received by or has accrued to any natural person who is ordinarily resident in Namibia, shall be deemed to have been derived from a source within Namibia, irrespective of where such purchased annuity contract was entered into or where the annuity is payable.[Subsection (3) is amended by Act 8 of 1987, deleted by Act 12 of 1991 and inserted by Act 21 of 1999.]

(4)Any amount referred to in paragraph (d) of the definition of “gross income” in section 1 shall be deemed to have been received by or to have accrued to any employee or the holder of any office from a source within Namibia, wheresoever payment of such amount is made and wheresoever the funds from which payment is made are situate.

(5)Any amount received or accrued by way of annuity in terms of the rules of any retirement annuity fund in respect of which any contribution was allowed as a deduction under the provisions of section 17 in determining the taxable income derived by any person, shall be deemed to have been received or accrued from a source within Namibia, irrespective of where payment of such amount is made and irrespective of where the funds from which payment is made are situate.[Subsection (5) is inserted by AG 10 of 1985 and amended by Act 8 of 1987.]

(6)Any amount received by or accrued to any person who is ordinarily resident in Namibia or in the case of a company is a domestic company, under or upon the surrender or disposal of any policy of insurance, shall be deemed to have been received or accrued from a source within Namibia if any premium in respect of such policy had been allowed as a deduction under the provisions of section 17.[subsection (6) inserted by AG 10 of 1985]

(7)Any amount referred to in paragraph (dA), (dB) or (dC) of the definition of “gross income” in section 1 shall be deemed to have been received or accrued from a source within Namibia, irrespective of where payment of such amount is made and irrespective of where the funds from which payment is made are situate.[Subsection (7) is inserted by Act 8 of 1987 and amended by Act 10 of 1993.]

(8)Any amount received by or accrued to a member of a retirement annuity fund shall be deemed to have been so received or accrued from a source within Namibia, irrespective of where payment of such amount is made and irrespective of where the funds from which payment is made are situate, if such member’s contribution to such retirement annuity fund was made by or on behalf of such member through the payment or transfer to such retirement annuity fund of a lump sum representing his or her accrued benefit in a pension fund, because -

(a)such pension fund ceased to exist; or

(b)the member, while being a member of such pension fund, elected that his or her accrued benefit in the pension fund be transferred to such retirement annuity fund or be appropriated to purchase an annuity with.

[subsection (8) inserted by Act 10 of 1993]

(9)Any amount referred to in paragraphs (o) and (q) of the definition of “gross income” is deemed to have been received or accrued from a source within Namibia, irrespective of-

(a)whether the transaction was concluded in or outside Namibia;

(b)the place where payment of such amount is made; or

(c)the place where the funds from which payment is made are held.

[subsection (9) inserted by Act 15 of 2011 and amended by section 1 of Act 13 of 2022]

16. Exemptions

(1)There shall be exempt from the tax -

(a)the revenues of the Government of Namibia and of any other state;[paragraph (a) substituted by Act 25 of 1992]

(b)the revenues of local authorities;

(c)the salaries and emoluments payable to any person who holds office in Namibia as an official of any government, other than the government of Namibia, or any Specialized Agency of the United Nations contemplated in the Convention on the Privileges and Immunities of the Specialized Agencies as approved by the General Assembly of the United Nations on 21 November 1947, provided such person is stationed in Namibia for that purpose by virtue of an agreement between such government or such a Specialized Agency and the Government of Namibia, is not a Namibian citizen or ordinarily resident in Namibia, and the salaries and emoluments concerned are paid from a source outside Namibia.[paragraph (c) substituted by Act 25 of 1992]

(d)the receipts and accruals (including receipts or accruals from investments) of any temporary building society, pension fund, provident fund, retirement annuity fund or benefit fund, or of any institution which in the opinion of the Minister is a mutual savings bank, a mutual loan association, a fidelity or indemnity fund, a trade union, a chamber of commerce or industries (or an association of such chambers), a local publicity association or a non-proprietary stock exchange;[paragraph (d) substituted by AG 10 of 1985]

(e)the receipts and accruals of -

(i)any institution, board or body established by or under any law (other than a company or co-operative society registered or deemed to be registered in terms of any law which governs, or any repealed law which governed, the incorporation or registration of companies or of co-operative societies), or any foreign organization or institution, and which, in the furtherance of its sole object or one of its principal objects, conducts scientific, technical or industrial research or provides necessary or useful commodities, amenities or services to the State (including any regional council) or the inhabitants of Namibia in general, or carries on activities (including the rendering of financial assistance by way of loans or otherwise) designed to promote commerce, industry or agriculture or any branch thereof, provided such institution, board or body is by law or under its constitution not permitted to distribute any of its profits or gains to any person and is required to utilize its funds solely for investment or the objects for which it has been established;

(ii)any Namibian company, all the shares of which are held by an institution, board or body referred to in subparagraph (i), if the Minister is satisfied that the operations of such company are ancillary or complementary to the objects of such institution, board or body;

[paragraph (e) substituted by Act 12 of 1996]

(f)the receipts or accruals of any company, society, or other association of persons, or any foreign organization or institution, whether or not registered under any law, but excluding a co-operative society or co-operative company registered under any law which governs, or any repealed law which governed, the registration of co-operative societies, if -

(i)the sole or principal object of such company, society or association is as follows, namely -

(aa)to conduct or promote scientific, technical or industrial research; or

(bb)to provide medical, dental, blood transfusion, hospital or nursing services; or

(cc)to engage in or promote nature conservation or animal protection activities; or

(dd)to engage in or promote activities which the Minister is satisfied are of a cultural nature; or

(ee)to provide social or recreational amenities or facilities for the members of such company, society or association; or

(ff)to promote the common interests of persons carrying on any particular kind of business, profession or occupation by means other than the carrying on by such company, society or association of any trading or other profit-making activities, or the participation by such company, society or association in any business, profession or occupation carried on by any of its members, or the provision to any of its members of financial assistance or of any premises or continuous services or facilities required by its members for the purpose of carrying on any business, profession or occupation;

(ii)the activities of such company, society or association are wholly or mainly directed to the furtherance of its sole or principal object;

(iii)such company, society or association is under its constitution not permitted to distribute any of its profit or gains to any person and is required to utilize its funds solely for investment or the objects for which it has been established; and

(iv)under the constitution of such company, society or association it will upon its winding-up or liquidation be obliged to give or transfer its assets remaining after the satisfaction of its liabilities to some other company, society or association with objects similar to those of the aforesaid company, society or association;

[paragraph (f) amended by Act 12 of 1996]

(g)the receipts and accruals of any association which in the opinion of the Minister is an amateur sporting association;

(h)[paragraph (h) deleted by AG 10 of 1985]

(i)the receipts and accruals of any company, society or other association of persons, whether or not registered under any law (other than a co-operative society or company registered under the Co-operative Societies Act, 1939 (Act 29 of 1939), or the Co-operative Societies Ordinance, 1946 (Ordinance 15 of 1946)), the profits or gains of which, other than profits or gains from investments (including the letting of property), are derived solely from transactions with or on behalf of its individual members, and the constitution of which does not admit of the distribution of its profits or gains to any persons other than the members with whom or on whose behalf the transactions took place, and does not confer upon any person any benefit other than benefits accruing to that person from transactions with or on behalf of that person, except as regards any receipts or accruals from investments (including the letting of property to non-members) by any such company, society or association: Provided that the provisions of this paragraph shall not be construed as requiring the taxable income of such company, society or association from investments (including the letting of property to non-members) to be determined at an amount greater than an amount determined to the satisfaction of the Minister as representing the taxable income on which such company, society or association would have been taxable under this Act if the exemption conferred by this paragraph had not been applicable;

(j)the receipts and accruals of all ecclesiastical, charitable and educational institutions of a public character, whether or not supported wholly or partly by grants from the public revenue;

(k)any amount received as a war pension, or as an award or a benefit under any law relating to the payment of compensation in respect of diseases contracted by persons employed in mining operations;

(l)interest received by or accrued to any person (other than a company) or any external company not carrying on business in Namibia, from stock or securities (including Treasury Bills) issued by the Government of Namibia, or any regional council or local authority in Namibia;[paragraph (l) amended by AG 12 of 1996]

(m)

(i)interest received by or accrued to any person, other than a company, from any deposit in the Post Office Savings Bank;[subparagraph (i) amended by Act 17 of 1994]

(ii)any amount credited as interest in respect of any subscription share in any building society in Namibia;

(iii)in the case of a taxpayer who is a natural person, so much of the aggregate of the amounts received or accrued as dividends on Special Tax-Free Indefinite Period Shares in building societies in Namibia as does not in any year of assessment exceed so much of the dividends, including any bonus or other distribution of profits, on such shares as are derived in respect of that portion of the total amount invested in such shares which is equal to the amount of N$100 000: Provided that this exemption shall not apply, unless -

(aa)such dividends are calculated at a rate not exceeding a rate determined by the Minister from time to time by notice in the Gazette for the purposes of this exemption; and

(bb)such Special Tax-Free Indefinite Period Shares are issued on such conditions, if any, as may be so determined by the Minister;

[subparagraph (iii) amended by Act 12 of 1991 (amendment markings incomplete)]

(iv)[Subparagraph (iv) is inserted by Act 8 of 1987 and deleted by Act 5 of 2007, with effect from 1 March 2009 (section 12(6) of Act 5 of 2007).]

(n)

(i)subject to the provisions of section 42, dividends received by or accrued to or in favour of any taxpayer;[Subparagraph (i) is amended by Act 25 of 1992 and substituted by Act 22 of 1995.]

(ii)[subparagraph (ii) deleted by Act 25 of 1992]

(iii)[subparagraph (iii) deleted by Act 22 of 1995]

(iv)[subparagraph (iv) deleted by Act 22 of 1995]

(v)[subparagraph (v) deleted by Act 25 of 1992]

(o)so much of any amount (being a lump sum) referred to in paragraph (c) of the definition of “gross income” in section 1 or in section 13(3) as does not exceed N$300 000 less the sum of any other amounts which have been excluded from the taxpayer’s income by virtue of the exemption conferred by this paragraph whether in the current or any previous year of assessment: Provided that the exemption under this paragraph shall not apply in respect of any amount received by or accrued to any person upon or because of the termination or because of the impending termination of the services required to be rendered by him or her as the holder of any office or employment in respect of the relinquishment, termination, loss, repudiation, cancellation or variation of his or her office or employment or in respect of his or her appointment (or right or claim to be appointed) to any office or employment, unless -

(i)such person has attained the age of fifty-five years; or

(ii)the Minister is satisfied that the termination or impending termination of such person’s services or the relinquishment, termination, loss, repudiation, cancellation or variation of his or her appointment (or right or claim to be appointed) to any office or employment is due to superannuation, ill-health or other infirmity; or

(iii)[subparagraph (iii) deleted by Act 25 of 1992]

(iv)the Minister is satisfied that the termination of the taxpayer’s services is due to the taxpayer having become redundant as a consequence of his or her employer having effected a reduction in personnel or due to his or her employer having ceased to carry on or intending to cease carrying on the trade in respect of which the taxpayer was employed;

[Paragraph (o) is amended by AG 10 of 1985, Act 33 of 1991 and Act 22 of 1995, with this amendment deemed to have come into force at the beginning of the year of assessment which commenced on or after 1 March 1994 (section 5(2) of Act 22 of 1995). It is further amended by Act 21 of 1999 and by Act 5 of 2010.]

(p)where an employee is as a condition of his employment required while on duty to wear a special uniform which is clearly distinguishable from ordinary clothing, the value of any such uniform given to the employee by his employer, or so much of any allowance made by the employer to the employee in lieu of any such uniform as the Minister considers reasonable;

(q)any amount received by or accrued to any person from such person’s spouse or former spouse by way of alimony or allowance or maintenance of such person or any children under an order of divorce or a judicial order or written agreement of separation;

(r)interest received by or accrued to any domestic company or any person who is ordinarily resident in Namibia in respect of any loan, deposit, advance, participation bond, debenture or interest-bearing security, or any dividend distributed by any building society which accrues from a source outside Namibia to any such domestic company or person, if it is proved to the satisfaction of the Minister -

(i)

(aa)that such loan, deposit or advance has been made and retained outside Namibia or that such participation bond has been registered outside Namibia or that such debenture, interest-bearing security or share to which such dividend relates has been subscribed for or issued or held outside Namibia for the purposes of any business carried on by such company or person outside Namibia; and

(bb)that the said interest or dividend is subject to income tax under the laws of the country within which such loan, deposit or advance has been made and retained or such participation bond has been registered or that such debenture, interest-bearing security or share has been subscribed for or issued or held; or

(ii)that such loan, deposit or advance has been made and retained outside Namibia or that such participation bond has been registered outside Namibia or that such debenture, interest-bearing security or share to which such dividend relates has been subscribed for or issued or held outside Namibia, and that the full capital for such loan, deposit, advance, participation bond, debenture, interest-bearing security or share was obtained from a source outside Namibia;

[paragraph (r) amended by Act 8 of 1987 and by Act 12 of 1991]

(s)[paragraph (s) amended by Act 8 of 1987 and deleted by Act 12 of 1991]

(t)the receipts and accruals of the Labour Promotion Fund, established under section 1 of Proclamation R.69 of 1975 by the State President of the Republic of South Africa;

(u)[paragraph (u) deleted by Act 21 of 1999]

(v)any amount received or accrued which is proved to the satisfaction of the Minister to be a single grant on obtaining a higher or additional academic qualification at any acknowledged educational institution;[paragraph (v) amended by Act 8 of 1987]

(w)so much of any amount received by or accrued to any person as is proved to the satisfaction of the Minister to be a bona fide bursary granted to enable or assist such person to study at a recognized educational or research institution;

(x)[paragraph (x) deleted by Act 10 of 1993]

(y)[paragraph (y) repealed by section 1 of Act 12 of 2022]

(z)so much of a lump sum benefit derived by the taxpayer from any pension fund, provident fund or preservation fund, as contemplated by paragraph (d), (dB) or (dD) of the definition of “gross income”, and as is proved to the satisfaction of the Minister to have been paid or transferred during the year of assessment in question or within a period of three months after the end of such year of assessment, to any pension fund, provident fund, retirement annuity fund or preservation fund, for the benefit of such taxpayer: Provided that no amount shall be exempt from the tax if such amount may be claimed as a deduction in terms of paragraph (n) or (q) of subsection (1) of section 17;[Paragraph (z) is inserted by Act 8 of 1987, deleted by Act 12 of 1991, inserted by Act 25 of 1992 and substituted by Act 22 of 1995 and by Act 21 of 1999, with this substitution deemed to have come into force at the beginning of the year of assessment commencing on or after 1 March 1998 (section 5(2)(a) of Act 21 of 1999).]

(aa)an amount equal to one-third of any amount derived from a provident fund, except where such amount is so derived as a consequence of the termination of the taxpayer’s office or employment due to dismissal or resignation or upon the dissolution of such provident fund or a provident preservation fund due to the retirement or death of the member of such fund;[Paragraph (aa) is inserted by Act 25 of 1992 and amended by Act 12 of 1996 and by Act 21 of 1999, with this substitution deemed to have come into force at the beginning of the year of assessment commencing on or after 1 March 1998 (section 5(2)(a) of Act 21 of 1999).]

(ab)

(i)so much of any amount received by or accrued to any taxpayer or any beneficiary nominated by the taxpayer, under or upon the maturity, payment, surrender or disposal of an education policy as is proved to the satisfaction of the Minister has been or is to be expended for providing for the education or training of a child or step-child of the taxpayer, and which education or training -

(aa)is provided or will be provided at an educational institution of a public character; and

(bb)is undergone or will be undergone by such child or step-child for the purpose of obtaining a post-school qualification;

(ii)For the purposes of subparagraph (i) “child or step-child” means any such child who on the last day of the said year of assessment was unmarried, was not or would not, had he or she been alive, have been over the age of twenty-six years, was wholly or partially dependent for his or her maintenance upon the taxpayer and not liable for the payment of normal tax in respect of such year.

[Paragraph (ab) is inserted by Act 10 of 1993 and amended by Act 22 of 1995, Act 12 of 1996 and Act 15 of 2011. It should end with a semicolon.]

(ac)the income of a company referred to in paragraph (e) of the definition of “company” in section 1;[Paragraph (ac) is inserted by Act 22 of 1995 and amended by Act 21 of 1999, with this amendment deemed to have come into operation at the beginning of the year of assessment commencing on or after 1 January 1998 (section 5(2)(b) of Act 21 of 1999).]

(ad)annuities paid by an insurer outside Namibia from any purchased annuity contract entered into outside Namibia, to any natural person who is ordinarily resident in Namibia, if it is proved to the satisfaction of the Minister that the full capital invested in such purchased annuity contract was obtained from a source outside Namibia; and[Paragraph (ad) inserted by Act 21 of 1999. The word “and” at the end of paragraph (ad) should be removed since additional paragraphs have been added to the subsection.]

(ae)the receipts and accruals of any pension fund, provident fund, preservation fund or retirement annuity fund managed and controlled in a country other than Namibia if, having regard to the rules of the fund and the manner in which it is administered, such fund is substantially similar to a pension fund, provident fund, preservation fund or retirement annuity fund: Provided that the receipts and accruals of pension funds, provident funds, preservation funds or retirement annuity funds managed and controlled in Namibia are exempt from any tax imposed by such other country.[Paragraph (ae) is inserted by Act 21 of 1999. It should end with a semicolon.]

(af)the salaries and emoluments payable to any person who is stationed in Namibia by virtue of a technical assistance agreement entered into between the Government of Namibia and any organisation or the government of any other country: Provided that such person is not a Namibian citizen or ordinarily resident in Namibia and the salaries and emoluments concerned are paid from a source outside Namibia.[Paragraph (af) is inserted by Act 4 of 2005, with this insertion deemed to have come into force on 1 March 2004 (section 8(2) of Act 4 of 2005). The paragraph should end with a semicolon and the word “and”.]

(ag)interest received by or accrued to any person (other than a Namibian company) from a trust or partnership that received interest, which is proved to the satisfaction of the Minister that tax was withheld in terms of section 34A.[Paragraph (ag) is inserted by Act 5 of 2007 with effect from 1 March 2009 (section 12(6) of Act 5 of 2007) and amended by Act 5 of 2010.]

(2)Notwithstanding the exemptions provided for in subsection (1)(l), (m) and (n) -

(a)all amounts falling within the scope of the said paragraphs shall be set out by the taxpayer in the return rendered by him; and

(b)the said exemptions shall not apply in respect of any portion of an annuity.

(3)The exemptions provided by any paragraph of subsection (1) shall not extend to any payments out of the revenues, receipts, accruals or profits mentioned in such paragraph.

(4)[subsection (4) amended by Act 8 of 1987 and by Act 25 of 1992, and deleted by Act 22 of 1995]

16A. Taxation of housing benefits

(1)For the purposes of this section -“approved scheme” means a scheme approved under subsection (4);“housing benefit” means any amount in cash or benefit or advantage paid or granted under an approved scheme to an employee in respect of employment, which relates to -

(a)residential accommodation (excluding meals) provided by his or her employer, whether free of charge or for a rental consideration which is less than the rental value of such accommodation as determined by the Minister;

(b)any cash payment made or subsidy granted by his or her employer in respect of -

(i)any rental due by him or her for the lease of a private residence; or

(ii)the repayment of, or any interest due on, the amount of any loan obtained and used by him or her for the purchase of a private residence; or

(c)a rate of interest which is less than an appropriate rate of interest as determined by the Minister, charged by his or her employer on a loan granted by such employer out of his or her own funds to such employee and obtained and used by such employee for the purchase of a private residence;

[definition of “housing benefit” amended by Act 12 of 1996]“purchase” includes the improving of a private residence; and“remuneration” shall have the meaning assigned to that word in paragraph (1) of Part I of Schedule 2, but excluding any housing benefit, leave pay, honorarium, gratuity, overtime pay or refund or contributions referred to in paragraph (d) of the definition of “gross income” in section 1.

(2)The cash equivalent of a housing benefit referred to in paragraph (a) of the definition of “housing benefit” in subsection (1) shall, in the case of a person whose remuneration for the year of assessment -

(a)does not exceed N$15 000, be exempt from tax; or

(b)exceeds N$15 000, but not N$30 000, be reduced -

(i)by an amount equal to such percentage of such cash equivalent as determined in accordance with the formula -

in which formula y represents the percentage to be determined and x the amount of the said remuneration which exceeds N$15 000; and

(ii)by an additional amount equal to one-third of such cash equivalent, after deduction of the amount determined in accordance with subparagraph (i).

(3)In any case where the provisions of subsection (2) do not apply, an amount equal to one-third of the cash equivalent of any housing benefit shall be exempt from tax.

(4)The Minister shall not approve any scheme for the purposes of this section unless he or she is satisfied that -

(a)such scheme is operated bona fide solely for the purpose of -

(i)providing assistance to an employee to lease or purchase a private residence; or

(ii)providing residential accommodation to an employee;

(b)no housing benefit under the scheme will be granted in substitution for any reward for services rendered which would otherwise have been granted to such employee; and

(c)such private residence or residential accommodation will be occupied by such employee personally.

[subsection (4) amended by Act 12 of 1996][section 16A inserted by Act 8 of 1991]

16B. Exemption of capital element of purchased annuities

(1)For the purposes of this section -“annuity amount” means an amount payable by way of annuity under an annuity contract;“annuity contract” means an agreement concluded between an insurer in the course of the business of such an insurer and a natural person (hereinafter referred to as the purchaser), in terms of which -

(a)the insurer agrees to pay to the purchaser or the purchaser’s spouse or surviving spouse an annuity or annuities (whether to one such person or to each of them) until the death of the annuitant or the expiry of a specified term;

(b)the purchaser agrees to pay to the insurer a lump sum cash consideration for such annuity or annuities; and

(c)no amounts are or will be payable by the insurer to the purchaser or any other person other than amounts payable by way of such annuity or annuities or, where an annuity is payable for a minimum term and such annuity is in the event of the death of the annuitant before the end of such term to continue to be payable to some third person for the balance of that term, amounts which may be so payable to such third person by way of such annuity,

but does not include any agreement for the payment by any insurer of any annuity which is under the rules of a pension fund or of a provident fund or of a preservation fund or of a retirement annuity fund payable to a member of such fund or to the widow of such member or to any other person;[The definition of “annuity contract” is amended by Act 12 of 1996 and by Act 21 of 1999 (changes of punctuation in Act 21 of 1999 not indicated by amendment markings).]“commencement”, in relation to an annuity contract, means the date on which the annuity contract is concluded;“expected return”, in relation to an annuity under an annuity contract, means an amount determined in a manner contemplated in this section as representing the sum of all the annuity amounts which may, as at the commencement of the annuity contract, be expected to become payable by way of the annuity from the said commencement;“valuator”, in relation to an insurer, means the valuator of the insurer contemplated in section 10 of the Insurance Act, 1943 (Act 27 of 1943).

(2)There shall be exempt from normal tax so much of any annuity amount payable to a purchaser or his spouse or surviving spouse (as contemplated in paragraph (a) of the definition of “annuity contract” in subsection (1)) as is determined in accordance with subsection (3) to represent the capital element of such amount.

(3)The capital element of an annuity amount shall be -

(a)a sum determined in accordance with the formula -

in which formula -Y, represents the sum to be determined;A, represents the amount of the cash consideration paid by the purchaser under the annuity contract in question as contemplated in paragraph (b) of the definition of “annuity contract” in subsection (1);B, represents the total expected returns of all the annuities provided for in the annuity contract in question;C, represents the aforesaid annuity amount; or

(b)where, by reason of any unpredictable contingency (other than the death or survival of any person), any amount payable by way of any annuity under the annuity contract in question is uncertain at the date on which the first payment by way of an annuity becomes due under that contract, such sum as may on the basis of a fair and reasonable calculation be taken to be the capital element of the aforesaid annuity amount: Provided that the said sum shall be determined in such manner that the capital element of all the annuity amounts becoming due during any year of assessment in respect of all the annuities under the said contract does not in total exceed an amount determined in accordance with the formula -

in which formula -Z, represents the amount to be determined;N, represents the probable number of years during which annuity amounts will be payable under the said annuity contract from the date on which the first of such amounts becomes due, due regard being had to the manner in which and the frequency with which such amounts are payable; andA, represents the amount of the cash consideration paid by the purchaser under the said annuity contract as contemplated in paragraph (b) of the definition of “annuity contract” in subsection (1).

(4)The valuator of an insurer who is a party to an annuity contract shall, before payment of the first annuity amount is made under such contract, or, where such payment was made before the date on which this section comes into operation, within one month after that date, or in either case within such period as the Minister may allow, make a calculation (with due regard to the provisions of subsection (5)) in the manner prescribed in paragraph (a) of subsection (3) or, if the provisions of paragraph (b) of that subsection are applicable, in accordance with that paragraph, of the capital element of all the annuity amounts to be paid under the said contract: Provided that -

(i)where the capital element is calculated under the said paragraph (a), it shall be sufficient if the capital element is calculated as a percentage to be applied to each of the said annuity amounts; or

(ii)where the capital element is calculated under the said paragraph (b), it shall be sufficient if a calculation is made of the amount to be determined in accordance with the formula in the proviso to that paragraph.

(5)A valuator who makes any calculation as provided in subsection (4) or any recalculation as provided in subsection (6)(b), shall do so in accordance with generally accepted actuarial principles or practice, and where a determination has to be made of the life expectancy of any person for the purpose of a calculation of the expected return of any annuity or the probable number of years during which annuity amounts will be paid under any annuity contract, the mortality tables to be used for such determination shall be the select tables in the volume of tables published in 1953 at the University Press, Cambridge, for the Institute of Actuaries and the Faculty of Actuaries, entitled “The a (55) Tables for Annuitants”, and the age of the person concerned shall for the purposes of such determination be taken to be his age on his birthday immediately preceding the commencement of the annuity contract in question.

(6)

(a)Where any annuity contract is varied so that it no longer conforms with the requirements prescribed in the definition of “annuity contract” in subsection (1), the exemption conferred by subsection (2) in respect of the capital element of annuity amounts under that contract shall not apply in respect of such amounts under that contract which become due on or after the date of such variation.

(b)Subject to the provisions of paragraph (a), where any annuity contract is varied as to the payment of any annuity or consideration payable thereunder, the capital element of annuity amounts becoming due thereunder after such variation is effected shall, with due regard to the provisions of subsection (5), be recalculated by the valuator of the insurer concerned.

(7)

(a)Where the capital element of annuity amounts has been calculated as provided in subsection (4) or has been recalculated as provided in subsection (6)(b), the insurer concerned shall furnish each annuitant under the annuity contract in question, within one month after the date on which the calculation or recalculation is made, as the case may be, or within such further period as the Minister may allow, with two copies of such calculation or recalculation, as the case may be.

(b)An annuitant who has received the two copies referred to in paragraph (a) shall submit one of them to the Minister as and when required by the Minister.

(8)The Minister shall, when making an assessment upon the taxpayer concerned for the year of assessment during which there has become payable the first annuity amount affected by a calculation referred to in subsection (4) or a recalculation referred to in subsection (6)(b), determine the capital element of annuity amounts received or accrued during such year and affected by such calculation or recalculation, as the case may be, in accordance with such calculation or recalculation or, if the Minister is dissatisfied with such calculation or recalculation or is in doubt as to the correctness thereof, or if no such calculation or recalculation has been made, the Minister may, having regard to any calculation or recalculation of the capital element made by a practising actuary at the Minister’s request or at the request of the taxpayer, calculate or recalculate the capital element and determine the capital element of the said annuity amounts accordingly.[subsection (8) amended by Act 12 of 1996]

(9)Any decision of the Minister in the exercise of his discretion under the provisions of subsection (8) shall, in respect of a year of assessment referred to in that subsection, be subject to objection and appeal.

(10)Subject to the provisions of section 69, the final calculation or recalculation of the capital element as made in relation to the year of assessment referred to in subjection (8) shall, subject to the provisions of subsection (6)(b), be final and conclusive and shall apply in respect of all relevant annuity amounts which become due to any person under the annuity contract in question in any succeeding years of assessment.[section 16B inserted by Act 12 of 1991]

17. General deductions allowed in determination of taxable income

(1)For the purpose of determining the taxable income derived by any person from carrying on any trade within Namibia, there shall be allowed as deductions from the income of such person so derived -

(a)expenditure and losses actually incurred in Namibia in the production of the income, provided such expenditure and losses are not of a capital nature;

(b)so much as the Minister may allow of any expenditure and losses actually incurred outside Namibia in the production of the income, provided such expenditure and losses are not of a capital nature;

(c)any legal expenses (being fees for the services of legal practitioners, expenses incurred in procuring evidence or expert advice, court fees, witness fees and expenses, taxing fees, the fees and expenses of sheriffs or messengers of court and other expenses of litigation which are of an essentially similar nature to any of the said fees or expenses) actually incurred by the taxpayer during the year of assessment in respect of any claim, dispute or action at law arising in the course of or by reason of the ordinary operations undertaken by him in the carrying on of his trade: Provided that the amount to be allowed under this paragraph in respect of any such expenses, shall be limited to so much thereof as -

(i)is not of a capital nature; and

(ii)is not incurred in respect of any claim made against the taxpayer for the payment of damages or compensation if by reason of the nature of the claim or the circumstances any payment which is or might be made in satisfaction or settlement of the claim does not or would not rank for deduction from his income under paragraph (a) or (b); and

(iii)is not incurred in respect of any claim made by the taxpayer for the payment to him of any amount which does not or would not constitute income of the taxpayer; and

(iv)is not incurred in respect of any dispute or action at law relating to any such claim as is referred to in paragraph (ii) or (iii) of this proviso;

(d)expenditure actually incurred during the year of assessment on repairs of property occupied for the purpose of trade or in respect of which income is receivable, including any expenditure so incurred on the treatment against attack by beetles of any timber forming part of such property and sums expended for the repair of machinery, implements, utensils and other articles employed by the taxpayer for the purposes of his trade;

(e)expenditure incurred during the year of assessment in respect of the acquisition of vehicles, aircraft, sea-going craft, machinery, implements, utensils and articles used by the taxpayer for the purpose of the taxpayer’s trade: Provided that the amount of any such expenditure shall not be fully deductible in the same year of assessment, but shall be deducted, one-third in the year of assessment in which the expenditure is incurred, one-third in the first ensuing year of assessment and one-third in the second ensuing year of assessment, but if any such vehicle, aircraft, sea-going craft, machinery, implement, utensil or article is sold or otherwise disposed of by the taxpayer during any of such years of assessment, no such deduction shall be allowed in respect of such vehicle, aircraft, sea-going craft, machinery, implement, utensil or article in that year of assessment or any such ensuing year of assessment which may remain: Provided further that where, at the commencement of the year of assessment ending on 28 February 1993, or, in the case of a company, at the commencement of the financial year ending on or after 1 March 1992, a taxpayer holds for purposes of such taxpayer’s trade any vehicles, aircraft, sea-going craft, machinery, implements, utensils or articles not previously disposed of or scrapped by the taxpayer, the original cost to the taxpayer of such asset less any deductions allowed to the taxpayer in respect thereof in terms of sections 11(e), 12(1), 12A(2), 14 and 14bis of the Income Tax Act, 1962 (Act 58 of 1962), sections 14(e) and 15(2) of the Income Tax Ordinance, 1974 (Ordinance 5 of 1974), or the provisions of this paragraph before its amendment, or paragraph (t) of this section before its deletion by the Income Tax Amendment Act, 1992, shall be deemed to be expenditure incurred in respect of the acquisition of such vehicles, aircraft, sea-going craft, machinery, implements, utensils and articles during that year of assessment: Provided further that where any person becomes liable for the payment of the tax by reason of the repeal or amendment of any provision of this Act or any other law by virtue of which such person was exempted from the tax, any expenditure as contemplated in this paragraph which was incurred by such person at any time during the three years of assessment immediately preceding the year of assessment in which such person becomes so liable, shall be deemed to have been incurred in the year of assessment in which such person becomes so liable.[Paragraph (e) is amended by Act 25 of 1992, Act 10 of 1993 and Act 22 of 1995. It is also amended by Act 5 of 1997, with this amendment deemed to have come into force (a) in the case of any taxpayer other than a company, at the beginning of the year of assessment commencing on or after 1 March 1998; and (b) in the case of any taxpayer which is a company, at the beginning of the year of assessment commencing on or after 1 January 1998 (section 12(b) of Act 5 of 1997). It is further amended by Act 21 of 1999.]

(eA)subject to section 24(g), financing expenditure incurred during the year of assessment by the tax-payer in respect of any financing agreement for the acquisition of any item referred to in paragraph (e).[Paragraph (eA) is inserted by Act 7 of 2002. It should end with a semicolon.]

(f)in respect of buildings used by the taxpayer for the purposes of such taxpayer’s trade, an allowance equal to 20 per cent of the cost of erection of such buildings in the year of assessment during which such buildings are brought into use, and four per cent of such costs for each of the 20 years following on the year of assessment during which such buildings are brought into use: Provided that no allowance is made under this paragraph–

(i)where any allowance in respect of such costs has already been granted under paragraph (h);

(ii)in respect of buildings used or to be used by the taxpayer for the making available of housing or housing facilities to employees or, where the taxpayer is a company, to employees or directors or officials of such company;

[Paragraph (f) amended by AG 10 of 1985 and substituted by Act 15 of 2011 and by section 2 of Act 5 of 2021][Notwithstanding the amendment of section 17(1)(f), the special income tax incentives granted to registered manufacturers in terms of that section shall continue to apply until the end of the 2025 tax year in respect of each registered manufacturer (section 4 of Act 5 of 2021).]

(g)an allowance in respect of any premium or consideration in the nature of a premium paid by a taxpayer for -

(i)the right of use or occupation of land or buildings used or occupied for the production of income or from which income is derived; or

(ii)the right of use of any plant or machinery used for the production of income or from which income is derived; or

(iii)the right of use of any motion picture film or any sound recording or advertising matter connected with such film, if such film, sound recording or advertising matter is used for the production of income or income is derived therefrom; or

(iv)the right of use of any patent or design as defined in the Patents and Designs Proclamation, 1923 (Proclamation 17 of 1923), or any trade mark as defined in the Trade Marks in South West Africa Act, 1973 (Act 48 of 1973), or any copyright as defined in the Copyright Act, 1965 (Act 63 of 1965), or of any other property which in the opinion of the Minister is of a similar nature, if such patent, design, trade mark, copyright or other property is used for the production of income or income is derived therefrom; or

(v)the imparting of or the undertaking to impart any knowledge directly or indirectly connected with the use of such film, sound recording, advertising matter, patent, design, trade mark, copyright or other property as aforesaid:

Provided that -

(aa)the allowance under subparagraph (i), (ii), (iii) or (iv) shall not exceed for any one year such portion of the amount of the premium or consideration so paid as is equal to the said amount divided by the number of years for which the taxpayer is entitled to the use or occupation, or one twenty-fifth of the said amount, whichever is the greater;

(bb)if the taxpayer is entitled to such use or occupation, for an indefinite period he shall be deemed, for the purposes of this paragraph, to be entitled to such use or occupation for such period as in the opinion of the Minister represents the probable duration of such use or occupation; and

(cc)the allowance under subparagraph (v) shall not exceed for any one year such portion (not being less than one twenty-fifth) of the amount of the premium or consideration so paid as the Minister may allow having regard to the period during which the taxpayer will enjoy the right to use such film, sound recording, advertising matter, patent, design, trade mark, copyright or other property as aforesaid and any other circumstances which in the opinion of the Minister are relevant;

[The Patents and Designs Proclamation 17 of 1923 will be replaced by the Industrial Property Act 1 of 2012, which has not yet been brought into force. The Copyright Act 63 of 1965 has been replaced by the Copyright and Neighbouring Rights Protection Act 6 of 1994.]

(h)an allowance in respect of any expenditure actually incurred by the taxpayer, in pursuance of an obligation to effect improvements on land or to buildings, incurred under an agreement whereby the right of use or occupation of land or buildings is granted by any other person, where the land or buildings are used or occupied for the production of income or income is derived therefrom: Provided that -

(i)the aggregate of the allowances under this paragraph shall not exceed the amount stipulated in the agreement as the value of the improvements or as the amount to be expended on the improvements or, if no amount is so stipulated, an amount representing in the opinion of the Minister the fair and reasonable value of the improvements;

(ii)any such allowance shall not exceed for any one year such portion of the aggregate of the allowances under this paragraph as is equal to the said aggregate divided by the number of years (calculated from the date on which the improvements are completed) for which the taxpayer is entitled to the use or occupation, or one twenty-fifth of the said aggregate, whichever is the greater; and

(iii)if the taxpayer is entitled to such use or occupation for an indefinite period, he shall for the purposes of this paragraph be deemed to be entitled to such use or occupation for such period as in the opinion of the Minister represents the probable duration of such use or occupation;

(i)an allowance in respect of any expenditure (other than expenditure which has qualified in whole or part for deduction or allowance under any of the other provisions of this section or the corresponding provisions of any previous income tax law) actually incurred by the taxpayer -

(i)in devising or developing any invention, or in creating or producing any design as defined in the Patents and Designs Proclamation, 1923 (Proclamation 17 of 1923), or any trade mark as defined in the Trade Marks in South West Africa Act, 1973 (Act 48 of 1973), or any copyright as defined in the Copyright Act, 1965 (Act 63 of 1965), or any other property which in the opinion of the Minister is of a similar nature; or

(ii)in obtaining any patent or the restoration of any patent or the registration of any design under the Patents and Designs Proclamation, 1923, or the registration of any trade mark under the Trade Marks in South West Africa Act, 1973; or

(iii)in acquiring by assignment from any other person any such patent, design, trade mark or copyright or in acquiring any other property which in the opinion of the Minister is of a similar nature or any knowledge connected with the use of such patent, design, trade mark, copyright or other property or the right to have such knowledge imparted,

if such invention, patent, design, trade mark, copyright, other property or knowledge, as the case may be, is used by the taxpayer in the production of his income or income is derived by him therefrom: Provided that -

(aa)where such expenditure exceeds two hundred Namibia Dollar the allowance shall not exceed for any one year such portion of the amount of the expenditure as is equal to such amount divided by the number of years which, in the opinion of the Minister, represents the probable duration of use of the invention, patent, design, trade mark, copyright, other property or knowledge, or one twenty-fifth of the said amount, whichever is the greater;

(bb)where such expenditure was incurred before the commencement of the year of assessment in question the allowance shall be calculated on the amount of such expenditure, less an amount equivalent to the sum of the allowances to which the taxpayer was entitled under this paragraph and the allowances to which, in the opinion of the Minister, the taxpayer would have been entitled under this paragraph if this paragraph had been applicable, in respect of such expenditure in respect of previous years of assessment, including any year of assessment under any previous income tax law;

(j)expenditure (other than expenditure which has qualified in whole or part for deduction or allowance under any of the other provisions of this section) actually incurred by the taxpayer during the year of assessment in obtaining the extension of the term of any patent or the extension of the registration period of any design under the Patents and Designs Proclamation, 1923 (Proclamation 17 of 1923), or the renewal of the registration of any trade mark under the Trade Marks in South West Africa Act, 1973 (Act 48 of 1973), if such patent, design or trade mark is used by the taxpayer in the production of his income or income is derived by him therefrom;[The Patents and Designs Proclamation 17 of 1923 will be replaced by the Industrial Property Act 1 of 2012, which has not yet been brought into force.]

(k)such allowance in respect of any amounts included in the taxpayer’s gross income under paragraph (f) or (l) of the definition of “gross income” in section 1 as the Minister may deem reasonable having regard to any special circumstances of the case and, in the case of an amount so included under the said paragraph (l), to the original period for which the right of use or occupation was granted: Provided that where there has accrued to the taxpayer the right to have improvements effected on land or to buildings by any other person and an amount is required to be included in the taxpayer’s gross income under the said paragraph (l) with respect to such improvements, no allowance shall be made to the taxpayer under this paragraph in respect of such amount, if -

(i)the taxpayer or such other person is a company and such other person or the taxpayer, as the case may be, is interested in more than fifty per cent of any class of shares issued by such company, whether directly as a shareholder in that company or indirectly as a shareholder in any other company; or

(ii)both the taxpayer and such other person are companies and any third person is interested in more than fifty per cent of any class of shares issued by one of those companies and in more than fifty per cent of any class of shares issued by the other company, whether directly as a shareholder in the company by which the shares in question were issued or indirectly as a shareholder in any other company;

(l)the amount of any debts due to the taxpayer to the extent to which they are proved to the satisfaction of the Minister to be bad, provided such amount is included in the current year of assessment or was included in the previous years of assessment in the taxpayer’s income;

(m)such an allowance as may be made each year by the Minister in respect of such debts due to the taxpayer as he considers to be doubtful: Provided that such allowance shall be included in the income of the taxpayer in the following year of assessment, and for that purpose any allowance granted in terms of any previous income tax law, shall be deemed to be an allowance which was made in terms of this paragraph;

(n)

(i)subject to subsection (2), any sum contributed during the year of assessment by way of current contributions to any pension fund or provident fund by any person holding any office or employment where the making of such a contribution is a condition of the holding of such office or employment;[Subparagraph (i) is amended by AG 10 of 1985 and by Act 25 of 1992.]

(ii)[Subparagraph (ii) is amended by Act 8 of 1987 and deleted by Act 25 of 1992.]

(o)any sum contributed by the taxpayer during the year of assessment for the benefit of the taxpayer’s employees to any pension fund, benefit fund or provident fund: Provided that -[introductory portion of paragraph (o) amended by Act 25 of 1992]

(i)in respect of any lump sum contribution, the Minister may determine that the said sum shall be deducted in a series of annual instalments, so that only a portion thereof is deducted in the year of assessment in which it is contributed, and the residue in such subsequent years of assessment, and in such proportions as the Minister may determine, until the contribution is extinguished;

(ii)if the contributions (including any lump sum payments) made by the taxpayer in respect of any employee during any year of assessment to such fund exceed an amount equal to ten per cent of the approved remuneration of such employee for such year of assessment, and the Minister is satisfied that the aggregate of such contributions and the total remuneration accrued during such year of assessment to such employee in respect of his employment by the taxpayer is excessive or unjustifiable in relation to the value of the services rendered by such employee to the taxpayer, and having regard to other benefits, if any, derived by him from his employment by the taxpayer only so much of such contributions as appears to the Minister to be reasonable, but not less than an amount equal to ten per cent of the approved remuneration of such employee for such year of assessment, shall be allowed to be deducted under this paragraph:

(iii)any decision of the Minister under this paragraph, not being a decision under paragraph (i) of this proviso, shall be subject to objection and appeal,

and for the purposes of paragraph (ii) of this proviso “approved remuneration”, in relation to any employee for any year of assessment, means so much of the total remuneration accrued to such employee during such year of assessment in respect of his employment by the taxpayer concerned as the Minister considers to be fair and reasonable in relation to the value of the services rendered by such employee during such year of assessment to the taxpayer and having regard to other benefits, if any, derived by him from his employment by the taxpayer;

(p)any amount paid by way of annuity during the year of assessment by any taxpayer -

(i)to a former employee who has retired from the taxpayer’s employ on grounds of old age, ill-health or infirmity; or

(ii)to any person who is dependent for his maintenance upon a former employee or (where such former employee is deceased) was so dependent immediately prior to his death:

Provided that the deduction under subparagraph (ii) shall not exceed in respect of the persons so dependent on any one retired or deceased employee, the sum of two thousand rand;

(q)subject to subsection (2), so much of the total current contributions to any retirement annuity fund or funds made by any person as a member of such fund or funds during a year of assessment during which such person has carried on any trade;[Paragraph (q) is amended by Act 12 of 1982, AG 10 of 1985 and Act 9 of 1987, and substituted by Act 25 of 1992.]

(qA)subject to subsection (2), so much of the total current premiums paid during the year of assessment in question for an education policy taken out by the taxpayer to provide funds at a future date for the education or training of a child or step child of such taxpayer as contemplated in paragraph (ab) of section 16(1);[Paragraph (qA) is inserted by Act 10 of 1993 and amended by Act 15 of 2011.]

(r)expenditure incurred during the year of assessment by any taxpayer -

(i)for the purpose of scientific research undertaken by him for the development of his business, if such expenditure is not of a capital nature; or

(ii)by way of contributions to any association, institute, college or university, for scientific research relating to the taxpayer’s own business, if the Council for Scientific and Industrial Research certifies to the Minister that it approves the proposals of such association, institute, college or university, in regard to such research and that it is satisfied that such contributions will be used in such research;

(s)any amount donated by the taxpayer during the year of assessment to -

(i)a welfare organization registered or deemed to be registered under the National Welfare Act, 1965 (Act 79 of 1965), and which is approved by the Minister after consultation with the Minister of Health and Social Services; or

(ii)an educational institution approved by the Minister after consultation with the Minister of Higher Education, Vocational Training, Science and Technology or with the Minister of Basic Education and Culture, as the case may be:

Provided that -

(a)no deduction in terms of this paragraph shall give rise to or increase any loss;

(b)no individual is nominated as a beneficiary;

(c)a certificate containing particulars as determined by the Minister shall be issued by the welfare organization or educational institution in respect of any such donation; or

(d)no payment in respect of school fees or contribution to a school fund made to any school which a taxpayer is required to make shall be allowed as a deduction;

[Paragraph (s) is amended by Act 8 of 1987 and substituted by Act 22 of 1995.]

(t)[paragraph (t) deleted by Act 25 of 1992]

(u)an allowance in respect of any motor vehicle, machinery, implements, utensils or articles referred to in paragraph (e) equal to the amount by which the original cost to the taxpayer of such motor vehicle, machinery, implements, utensils or articles exceeds the total amount arrived at by adding the allowances granted in respect of such motor vehicle, machinery, implements, utensils or articles under paragraph (e) to the amount or the value of any consideration accruing to the taxpayer in respect of the sale or disposal of such motor vehicle, machinery, implements, utensils or articles;[paragraph (u) amended by Act 25 of 1992]

(v)any amounts which in terms of any other provision in this Part, are allowed to be deducted from the income of the taxpayer.[Paragraph (v) should end with a semicolon rather than a full stop now that it is no longer the last paragraph in subsection (1).]

(w)expenditure incurred by a taxpayer in respect of any premiums payable under a long-term insurance policy of which the taxpayer is the policyholder, where -

(i)[subparagraph (i) deleted by section 2(a) of Act 13 of 2022]

(ii)the taxpayer is insured against any loss by reason of the death, disablement or severe illness of an employee or director of the taxpayer;

(iii)the policy is a risk policy with no cash value or surrender value prior to the maturity date thereof or the death of the employee or director whose life is insured under the policy;

(iv)the policy is not the property of any person other than the taxpayer at the time of the payment of the premium, but any premium paid is not disallowed as a deduction by reason of the policy being held by a creditor of the taxpayer other than any person contemplated in paragraph (v) as security for a debt of the taxpayer; and

(v)no transaction, operation or scheme exists in terms of which any amount recoverable under the policy or an amount equivalent to or in lieu of such amount is to be made over by the taxpayer to or in favour of -

(aa)the employee or director or a connected person in relation to the employee or director;

(bb)the estate of the employee or director; or

(cc)any person who is or was wholly or partly dependent for his or her maintenance upon the employee or director;

[paragraph (w) inserted by Act 15 of 2011]

(x)an allowance in respect of any amount actually incurred by such person or company in the course of carrying on his or her trade, as compensation in respect of any restraint of trade imposed on any other person or company to the extent that such amount constitutes or will constitute income of the person or company to whom it is paid, but the amount allowed to be deducted under this paragraph shall not exceed for any one year the lesser of -

(i)so much of such amount so incurred as is equal to such amount divided by the number of years, or part thereof, during which the restraint of trade applies; or

(ii)one-third of such amount so incurred.

[paragraph (x) inserted by Act 13 of 2015]

(2)The aggregate of the amounts that may be deducted in terms of paragraphs (n), (q), (qA) and (w) of subsection (1) shall not, as from the year of assessment commencing on or after 1 March 2022 in any year of assessment exceed the sum of N$150 000.[Subsection (2) inserted by Act 25 of 1992, amended by Act 10 of 1993, by Act 5 of 1997 (with effect from (a) in the case of any taxpayer other than a company, at the beginning of the year of assessment commencing on or after 1 March 1998; and (b) in the case of any taxpayer which is a company, at the beginning of the year of assessment commencing on or after 1 January 1998 (section 12(b) of Act 5 of 1997)), by Act 21 of 1999, by Act 5 of 2007 (with effect from the beginning of the year of assessment commencing on or after 1 March 2007 (section 12(3) of Act 5 of 2007)), by Act 15 of 2011 and substituted by section 2(b) of Act 13 of 2022]

(3)[subsection (3) inserted by Act 22 of 1995 and deleted by Act 12 of 1996]

(4)[subsection (4) inserted by Act 22 of 1995 and deleted by Act 12 of 1996]

(5)[subsection (5) inserted by Act 22 of 1995 and deleted by Act 12 of 1996]

17A. ***

[section 17A inserted by Act 10 of 1993 and amended by Act 22 of 1995 and by Act 12 of 1996 and repealed by section 3 of Act 5 of 2021][Notwithstanding the repeal of section 17A, the special income tax incentives granted to registered manufacturers in terms of that section shall continue to apply until the end of the 2025 tax year in respect of each registered manufacturer (section 4 of Act 5 of 2021).]

17B. ***

[section 17B inserted by Act 10 of 1993 and amended by Act 17 of 1994 and by Act 12 of 1996 and substituted by Act 7 of 2002 and repealed by section 3 of Act 5 of 2021][Notwithstanding the repeal of section 17B, the special income tax incentives granted to registered manufacturers in terms of that section shall continue to apply until the end of the 2025 tax year in respect of each registered manufacturer (section 4 of Act 5 of 2021).]

17C. Allowance in respect of profits attributable to the export of certain manufactured goods

(1)Where a taxpayer’s taxable income has been derived, whether wholly or partly, from the export of goods manufactured in Namibia, but excluding fish or meat products, such taxable income shall be reduced by an allowance equal to 80% of the amount representing the taxable income so derived, but subject to subsection (3).[subsection (1) amended by Act 15 of 2011 (amendment markings incomplete)]

(2)Where the taxable income of a taxpayer contemplated in subsection (1) has not been wholly derived from the export of manufactured goods referred to in that subsection, the amount representing taxable income so derived shall be determined by the Minister in accordance with the relation which the gross profit of the taxpayer derived from such exports bears to the taxpayer’s total gross profit, and subject to such adjustments as the Minister in any particular case deems necessary to be made in order to reflect the true taxable amount derived from such exports.

(3)The Minister may for the purposes of subsection (1) prescribe the accounting procedures to be followed by taxpayers in general or a particular taxpayer in order to qualify for the allowance granted by that subsection, and may, in a case where any taxpayer has failed to adhere to any accounting procedures so prescribed, decline to allow any reduction as contemplated in that subsection, and in such an event the taxpayer concerned shall not be entitled to that reduction.[section 17C inserted by Act 17 of 1994 and repealed by section 2 of Act 2 of 2020 with effect from the end of five years commencing on 31 December 2020]

17D. ***

[section 17D inserted by Act 12 of 1996 and substituted by Act 7 of 2002 with effect from 1 January 2003 (section 7(2) of Act 7 of 2002) and repealed by section 3 of Act 5 of 2021][Notwithstanding the repeal of section 17D, the special income tax incentives granted to registered manufacturers in terms of that section shall continue to apply until the end of the 2025 tax year in respect of each registered manufacturer (section 4 of Act 5 of 2021).]

17E. Youth internship allowance

(1)For the purposes of this section-“registered internship agreement” means an agreement between an employer and an intern and certified by a designated authority; and“designated authority” means any institution or organisation designated by the Minister, by notice in the Gazette, to be an institution or organisation that may certify an internship agreement.

(2)In addition to actual costs deductions allowable in terms of this Act, where an intern and employer are parties to a registered internship agreement during a year of assessment there shall, in that year of assessment, be allowed to be deducted an internship allowance from the income derived by such employer from the trade carried on by such employer.

(3)The internship allowance referred to in subsection (2) shall be determined in accordance with the following formula:(A/B) x C - C = Internship allowancein which formula-

(a)“A” represents 50 per cent of the amount represented by “C”;

(b)“B” represents the corporate tax rate per cent; and

(c)“C” represents the actual cost incurred per annum or N$50 000, whichever is the lesser.

(4)Where a registered internship agreement is for a period of less than 12 months during the year of assessment, the amount of the internship allowance that is allowed to be deducted shall be limited to an amount which is proportionate to the number of months which the intern was a party to the agreement.

(5)An employer shall not claim an internship allowance for an internship period that exceeds 36 months of internship.

[section 17E inserted by section 2 of Act 4 of 2024]

18. Deductions from income derived from mining operations

(1)There shall be allowed to be deducted from the income derived by the taxpayer from mining operations -

(a)an amount in respect of capital expenditure to be ascertained under the provisions of section 36, in lieu of the allowances in section 17(1)( e), (f), (g) and (i);[paragraph (a) substituted by Act 12 of 1996]

(b)[Paragraph (b) is deleted by Act 5 of 2010 with effect from the beginning of the year of assessment commencing on or after 1 January 2010 in respect of a taxpayer which is a company(section 9(c) of Act 5 of 2010).]

(2)Any amount provided for in terms of subsection (1)(b)(ii), prior to its deletion, that is not utilized for the purpose mentioned in that subsection, shall be included in the taxpayer’s income in the year of assessment following the year of assessment within which the taxpayer ceases with mining operations, but if the amount so provided for or any part thereof is at any time, before the cessation of mining operations, utilized for any purpose other than that mentioned in the said subsection, the amount so utilized shall be included in the taxpayer’s income in the year of assessment within which the amount is so utilized.[Subsection (2) is amended by Act 5 of 2010 with effect from the beginning of the year of assessment commencing on or after 1 January 2010 in respect of a taxpayer which is a company (section 9(c) of Act 5 of 2010).][Section 18 is substituted by Act 25 of 1992. The amendment markings are too incomplete to be a useful guide to the changes made.]

19. Deduction of expenses incurred by a lessor of land let for farming purposes, in respect of soil conservation works

(1)Subject to the provisions of subsection (2), there shall be allowed to be deducted from the income derived by any taxpayer from letting any land on which bona fide pastoral, agricultural or other farming operations were carried on during the year of assessment, the expenditure incurred by him during such year in respect of the construction of soil conservation works, provided a certificate by the Minister for Agriculture and Nature Conservation is produced to the effect that such works have been approved under the provisions of the Soil Conservation Act, 1969 (Act 76 of 1969).

(2)Where expenditure incurred by the taxpayer during any year of assessment and ranking for deduction from income under subsection (1) exceeds the taxable income (as calculated before allowing any deduction under that subsection) derived by the taxpayer from letting land on which bona fide pastoral, agricultural or other farming operations were carried on during such year, the amount allowed to be deducted under subsection (1) in respect of the said year shall be limited to an amount equal to such taxable income (calculated as aforesaid), and the excess shall be carried forward and be deemed for the purposes of this section to be expenditure incurred by the taxpayer during the next succeeding year of assessment in respect of the construction of soil conservation works.

20. Deductions and set-off from income derived from dividends

(1)The provisions of section 17(1)(a) and (b) and section 21 shall, subject to the provisions of subsection (2) of this section, mutatis mutandis apply in relation to any income derived by any person in the form of dividends distributed by a building society.[subsection (1) amended by Act 25 of 1992 and by Act 12 of 1996]

(1A)[subsection (1A) inserted by Act 8 of 1987 and deleted by Act 25 of 1992]

(2)In respect of expenditure and losses not of a capital nature incurred by any person in the production of his or her income from dividends, the amounts to be deducted under section 17(1)(a) and (b), as applied by subsection (1) of this section, shall be an amount equal to two-thirds of the expenditure and losses so incurred.[subsection (2) amended by Act 8 of 1987 and by Act 25 of 1992, and substituted by Act 12 of 1996]

(3)In respect of income in the form of dividends derived by any person from a building society there shall be allowed as a deduction in the determination of the taxable income of such person an amount representing one-third of the amount of such dividends.[subsection (2) amended by Act 25 of 1992]

(4)In the case of a company which carries on long-term insurance business in Namibia there shall, in the determination of the taxable income derived by such company during any year of assessment in the form of dividends, be deducted from the income so derived by such company during such year an amount determined in accordance with the formula -

in which formula -

(a)“Y” represents the amount to be determined;

(b)“A” represents the taxable income, as determined before any deduction is made under this subsection, derived by such company during such year in the form of dividends;

(c)“B” represents an amount equal to so much of the income derived by the company during such year in the form of dividends as the Minister is satisfied has been included in the amount determined under the provisions of section 32(1) as the taxable income derived by such company during such year from the carrying on of long-term insurance business; and

(d)“C” represents the total income derived by the company during such year in the form of dividends.

(5)[Subsection (5) is substituted by AG 10 of 1985 and deleted by Act 25 of 1992.]

(6)Income received by or accrued to any person in the form of an annuity shall, notwithstanding the fact that such income may also be in the form of dividends or be income of the nature described in subsection (5), be deemed for the purposes of this section to be income derived otherwise than in the form of dividends.

21. Set-off of assessed losses

(1)For the purpose of determining the taxable income derived by any person from carrying on any trade within Namibia, there shall be set off against the income so derived by such person -

(a)any balance of assessed loss incurred by the taxpayer in any previous year which has been carried forward from the preceding year of assessment: Provided that the amount of such setoff does not exceed N$1 million or 80 per cent of the amount of taxable income determined, whichever is the greater, before taking into account the provisions of this section and section 36;[paragraph (a) substituted by section 3(a) of Act 4 of 2024]

(b)any assessed loss incurred by the taxpayer during the same year of assessment in carrying on in Namibia any other trade either alone or in partnership with others, otherwise than as a member of a company the capital whereof is divided into shares: Provided that the amount of such setoff does not exceed N$1 million or 80 per cent of the amount of taxable income determined, whichever is the greater, before taking into account the provisions of this section and section 36.[paragraph (b) substituted by section 3(b) of Act 4 of 2024]

(1A)Notwithstanding subsection (1) and subject to section 21A, no assessed loss shall be carried forward as a deduction for more than five years in respect of any taxpayer or 10 years in respect of entities involved in the mining, petroleum or green hydrogen industry.[subsection (1A) inserted by section 3(b) of Act 4 of 2024]

(1B)Where an assessed loss is determined in relation to any person in the carrying on of any trade, the limitation provided for in subsection (1A) shall not be affected by reason of only temporary discontinuance in the carrying on of that trade by such person[subsection (1B) inserted by section 3(b) of Act 4 of 2024]

(2)For the purposes of this section, “assessed loss” means any amount, as established to the satisfaction of the Minister, by which the deductions admissible under sections 17, 18 and 20, but excluding deductions admissible under section 17C, exceed the income in respect of which they are so admissible, or, if the context so requires, means an assessed loss as determined under section 29.[subsection (2) substituted by Act 7 of 2002 and by section 3(c) of Act 4 of 2024]

21A. Ring-fencing of assessed losses of certain trades

(1)Subject to subsection (3), where the circumstances in subsection (2) apply during any year of assessment in respect of any trade carried on by a natural person, any assessed loss incurred during that year in carrying on such trade may not be set off against any income of the person derived during that year otherwise than from carrying on such trade, despite section 21(1)(b).

(2)Subsection (1) applies where the sum of the taxable income of a person for a year of assessment determined without having regard to the other provisions of this section and any assessed loss and balance of assessed loss which were set off in terms of section 21 in determining the taxable income, equals or exceeds the amount of N$200 000, and where -

(a)the person, during the five year period ending on the last day of the year of assessment, has incurred an assessed loss in at least three years of assessment in carrying on the trade contemplated in subsection (1) (before taking into account any balance of assessed loss carried forward); or

(b)the trade contemplated in subsection (1) in respect of which the assessed loss was incurred constitutes -

(i)any sport practiced by the person;

(ii)any dealing in collectibles by the person;

(iii)the rental of residential accommodation unless at least 80 per cent of the residential accommodation is used by persons who are not relatives of the person for at least half of the year of assessment;

(iv)the rental of vehicles, aircraft or boats unless at least 80 per cent of the vehicles, aircraft or boats are used by persons who are not relatives of the person for at least half of the year of assessment;

(v)animal showing by the person;

(vi)farming or animal breeding unless the person carries on farming, animal breeding or activities of a similar nature on a full-time basis;

(vii)any form of performing or creative arts practiced by the person; or

(viii)any form of gambling or betting practiced by the person.

(3)Subsection (1) does not apply in respect of an assessed loss incurred by a person during any year of assessment from carrying on any trade contemplated in subsection (2)(a) or (b), where the trade constitutes a business in respect of which there is a reasonable prospect of deriving taxable income within a reasonable period having special regard to -

(a)the proportion of the gross income derived from the trade in the year of assessment in relation to the amount of the allowable deductions incurred in carrying on the trade during that year;

(b)the level of activities carried on by the person or the amount of expenses incurred by the person in respect of advertising, promoting or selling in carrying on the trade;

(c)whether the trade is carried on in a commercial manner, taking into account -

(i)the number of full-time employees appointed for purposes of the trade (other than persons partly or wholly employed to provide services of a domestic or private nature);

(ii)the commercial setting of the premises where the trade is carried on;

(iii)the extent of the equipment used exclusively for purposes of carrying on the trade; and

(iv)the time that the person spends at the premises conducting the business;

(d)the number of years of assessment during which assessed losses were incurred in carrying on the trade in relation to the period from the date when the person commenced carrying on the trade and taking into account -

(i)any unexpected events giving rise to any of those assessed losses; and

(ii)the nature of the business involved;

(e)the business plans of the person and any changes thereto to ensure that taxable income is derived in future from carrying on the trade; and

(f)the extent to which any asset attributable to the trade is used, or is available for use, by the person or any relative of the person for recreational purposes or personal consumption.

(4)Subsection (3) does not apply in respect of a trade contemplated in subsection (2)(b) carried on by a person during any year of assessment where the person has, during the 10 year period ending on the last day of the year of the assessment, incurred an assessed loss in at least six years of assessment in carrying on the trade (before taking into account any balance of assessed loss carried forward).

(5)Despite section 21(1)(a), any balance of assessed loss carried forward from the preceding year of assessment which is attributable to an assessed loss in respect of which subsection (1) applied in that preceding year or any prior year of assessment may not be set off against any income derived by the person otherwise than from carrying on the trade contemplated in subsection (1).

(6)For the purposes of this section and section 21, the income derived from any trade referred to in subsection (1) or (5), includes any amount which is included in the income of the person in terms of section 14 in respect of an amount deducted in any year of assessment in carrying on the trade.

(7)Despite anything to the contrary in this Act, all farming activities carried on by a person are deemed to constitute a single trade carried on by the person for the purposes of this section.

(8)Where subsection (2) applies during any year of assessment in respect of any trade carried on by a person, the person must indicate the nature of the business in his or her return contemplated in section 59 for the year of assessment.

(9)For the purposes of subsections (2)(a) and (4), any assessed loss incurred in any year of assessment ending on or before 28 February 2011 is not taken into account.

(10)For the purposes of this section -“assessed loss” means assessed loss as defined in section 21(2); and“relatives” in relation to a person means a spouse, parent, child, stepchild, brother, sister, grandchild or grandparent of the person.[section 21A inserted by Act 15 of 2011]

22. Amounts to be taken into account in respect of values of trading stocks

(1)The amount which shall, in the determination of the taxable income derived by any person during any year of assessment from carrying on any trade (other than farming), be taken into account in respect of the value of any trading stock held and not disposed of by him at the end of such year of assessment, shall be the cost price to such person of such trading stock, less such amount as the Minister may think just and reasonable as representing the amount by which the value of such trading stock, not being shares held by any company in any other company has been diminished by reason of damage, deterioration, change in fashion, decrease in the market value or for any other reason satisfactory to the Minister.

(2)The amount which shall in the determination of the taxable income derived by any person during any year of assessment from carrying on any trade (other than farming), be taken into account in respect of the value of any trading stock held and not disposed of by him at the beginning of any year of assessment, shall -

(a)if such trading stock formed part of the trading stock of such person at the end of the immediately preceding year of assessment, be the amount which was, in the determination of the taxable income of such person for such preceding year of assessment, taken into account in respect of the value of such trading stock at the end of such preceding year of assessment; or[paragraph (a) amended by Act 12 of 1996]

(b)if such trading stock did not form part of the trading stock of such person at the end of the immediately preceding year of assessment, be the cost price to such person of such trading stock.

(3)For the purposes of this section the cost price at any date of any trading stock in relation to any person shall be the cost incurred by such person, whether in the current or any previous year of assessment in acquiring such trading stock, plus any further costs incurred by him up to and including the said date in getting such trading stock into its then existing condition or location.

(4)If any trading stock has been acquired by any person for no consideration or for a consideration which is not measurable in terms of money, such person shall for the purposes of subsection (3) be deemed to have acquired such trading stock at a cost equal to the price which in the opinion of the Minister was the current market price of such trading stock on the date on which it was acquired by such person.

(5)

(a)If, for the purpose of determining the cost price of any trading stock, any person wishes to adopt the basis of trading stock valuation whereunder the last item of any class of trading stock acquired by him on any date is deemed to be the first item of that class of trading stock disposed of by him on or after that date, and such person satisfies the Minister that he will maintain records in respect of his trading stock which will be adequate for the purposes of applying the said basis and that his trading stock will be accounted for on the said basis in his records, any annual financial statements prepared for submission to shareholders or for proprietors and the financial statements furnished for income tax purposes, the said person may, with the written consent of the Minister, obtained before such person renders his return of income for the first year of assessment in respect of which the said basis of trading stock valuation is to be adopted, and subject to such conditions as the Minister, having regard to the circumstances of the case, may determine, adopt the said basis of trading stock valuation.

(b)Where the aforesaid basis of trading stock valuation has been adopted by any person in respect of any year of assessment as contemplated in this subsection, such basis and any conditions determined by the Minister under this subsection in relation to the adoption of the said basis shall be binding upon such person in respect of the said year of assessment and all subsequent years of assessment and may not be varied by him save with the consent of the Minister and subject to such conditions as the Minister, having regard to the circumstances of the case, may determine, which conditions shall be binding upon such person for the year of assessment in respect of which the variation is made and all subsequent years of assessment.

(c)Any conditions determined by the Minister under this subsection may include any conditions as to the manner in which the person concerned shall account for his trading stock, whether or not such condition may in some circumstances have the effect of deferring or accelerating liability for taxation.

(6)Any reference in this section to the beginning or end of a year of assessment includes -

(i)where the period assessed is less than twelve months, a reference to the beginning or end, as the case may be, of the period assessed;

(ii)where a return is accepted under subsection (16) of section 56 to a date other than the last day of February, a reference to the beginning or end, as the case may be, of the period covered by the return.

[Subsection (6) is amended by Act 5 of 1997, with this amendment deemed to have come into force (a) in the case of any taxpayer other than a company, at the beginning of the year of assessment commencing on or after 1 March 1997; and (b) in the case of any taxpayer which is a company, at the beginning of the year of assessment of such company commencing on or after 1 January 1997 (section 12(a) of Act 5 of 1997).]

(7)In this section any reference to a year of assessment includes a reference to a year of assessment under any previous income tax law.

23. Schemes of arrangement involving trading stock

(1)If, under any scheme of arrangement or reconstruction of any company or its affairs (including any scheme for the amalgamation of two or more companies and any other scheme) which is sanctioned by any order of court, any company (hereinafter referred to as the transferee company) has acquired from any other company (hereinafter referred to as the transferor company) any asset which was trading stock of the transferor company, and in respect of such acquisition -

(a)no consideration measurable in terms of money accrued from the transferee company to the transferor company; or

(b)a consideration accrued from the transferee company to the transferor company the money value of which was less than the market value of such asset on the date on which the transferee company acquired such asset,

such asset shall for the purposes of this Act be deemed to be trading stock of the transferee company, and, where paragraph (a) is applicable -

(i)the transferee company shall be deemed to have acquired such asset at a price equal to the cost price thereof to the transferor company; and

(ii)notwithstanding the provisions of section 22(2), no deduction shall, in the determination of the taxable income of the transferor company for the year of assessment of that company during which the transferee company acquired such asset, be made in respect of the value of such asset as trading stock.

(2)Any amount which is received by or accrues to the transferee company from the disposal of the said asset (or of any interest therein) shall be included in that company’s income, whether such amount is derived in carrying on any trade or otherwise or is derived from a source within or outside Namibia.

24. Deductions not allowed in determination of taxable income

No deductions shall in any case be made in respect of the following matters, namely -

(a)the cost incurred in the maintenance of any taxpayer, his family or establishment;

(b)domestic or private expenses, including the rent of or cost of repairs of or expenses in connection with any premises not occupied for the purposes of trade or of any dwellinghouse or domestic premises except in respect of such part as may be occupied for the purposes of trade;

(c)any loss or expense, the deduction of which would otherwise be allowable, to the extent to which it is recoverable under any contract of insurance, guarantee, security or indemnity;

(d)the taxation levied on incomes;

(e)income carried to any reserve fund or capitalized in any way;

(f)any expenses incurred in respect of any amounts received or accrued which do not constitute income as defined in section 1;

(g)any monies claimed as a deduction from income derived from trade to the extent to which such monies are not laid out or expended for the purposes of trade;[paragraph (g) amended by Act 21 of 1999 (amendment markings incomplete)]

(h)interest which might have been made on any capital employed in trade.[Paragraph (h) should end with a semicolon rather than a full stop now that it is no longer the last paragraph in section 24.]

(i)any amount paid in respect of land tax referred to in section 76 of the Agricultural (Commercial) Land Reform Act, 1995 (Act No. 6 of 1995).

[Paragraph (i) is inserted by Act 4 of 2005, with this insertion deemed to have come into force (a) in the case of any taxpayer other than a company, at the beginning of the year of assessment commencing on or after 1 March 2004; and (b) in the case of any taxpayer which is a company, at the beginning of the year of assessment of such company commencing on or after 1 January 2004 (section 8(3) of Act 4 of 2005).]

25. Credit agreements providing for postponement of the passing of ownership

If any taxpayer has entered into any agreement with any other person in respect of any property, the effect of which is that, in the case of movable property, the ownership shall pass or, in the case of immovable property, transfer shall be effected from the taxpayer to that other person upon or after the receipt by the taxpayer of the whole or a certain portion of the amount payable to the taxpayer under the agreement, the whole of that amount shall for the purposes of this Act be deemed to have accrued to the taxpayer on the day on which the agreement was entered into: Provided that, the Minister, taking into consideration any allowance he or she has made under paragraph (m) of section 17(1), may make such further allowance as under the special circumstances of the trade of the taxpayer seems to him or her reasonable, in respect of all amounts which are deemed to have accrued under such agreements but which have not been received at the close of the taxpayer’s accounting period: Provided further that any allowance so made shall be included as income in the taxpayer’s returns for the following year of assessment and shall form part of his or her income, and for that purpose any allowance granted in terms of the corresponding provisions of a previous income tax law shall be deemed to be an allowance which was made in terms of this section in respect of a year of assessment under this Act.[section 25 amended by Act 12 of 1996]

25A. Gains or losses on foreign exchange transactions

(1)Where any taxpayer has on or after 1 March 1981 paid any amount owed by him in respect of any loan or advance in a foreign currency or of any debt incurred in a foreign currency and in paying such amount, has realized a gain or sustained a loss, such gain shall in the determination of the taxpayer’s taxable income be included in the taxpayer’s income or such loss shall in the said determination be deducted from the taxpayer’s income, if such loan or advance was utilized or such debt was incurred by the taxpayer for the purpose of incurring or financing expenditure incurred by the taxpayer or, where the taxpayer is a company, by an associated company in relation to the taxpayer, in order to produce income derived by the taxpayer or associated company, as the case may be, from carrying on any business undertaking in Namibia.

(2)Such gain or loss shall be deemed to be the difference between the equivalent in the currency of Namibia of the amount referred to in subsection (1), when the loan or advance in question was utilized or the debt was incurred by the taxpayer as aforesaid, and the equivalent amount in the currency of Namibia actually required to pay the said amount, and such gain or loss shall be deemed to have been realized or sustained at the time when the said amount was paid: Provided that where, subsequent to the date on which the loan or advance was utilized or the debt was incurred, any change in foreign currency rates occured in consequence of which the difference between the value of the said amount (or a portion thereof) on the said date and the value thereof when the change in foreign currency rates occurred was taken into account for normal tax purposes, the amount so taken into account shall be suitably accounted for for the purposes of determining the said gain or loss.[The word “occurred” is misspelt in the Official Gazette, as reproduced above.]

(3)Any gain realized or any loss sustained by reason of a change in foreign currency exchange rates shall, to the extent that such gain is required to be included in the taxpayer’s income under any other provision of this Act or to the extent that such loss is allowable as a deduction from the taxpayer’s income under any other provision of this Act, not be included in or be allowed as a decuction from the taxpayer’s income under this section, as the case may be.[The word “deduction” is misspelt in the Official Gazette in its second use, as reproduced above.]

(4)There shall be included in the taxpayer’s income for any year of assesment so much of any loss allowed to be deducted from his income under this section as has been recovered or recouped by him during such year, whether the loss was incurred in that year or in any previous year of assessment.[The word “assessment” is misspelt in the Official Gazette in its first use, as reproduced above.]

(5)Where any taxpayer has obtained and utilized any loan or advance in a foreign currency for the purpose of repaying any amount owed by him in respect of a loan or advance in foreign currency utilized for a purpose contemplated in subsection (1) or of any debt incurred by him for such a purpose, the loan or advance so obtained shall, to the extent that it does not exceed the said amount, be deemed for the purposes of this section to have been utilized by the taxpayer for the said purpose.

(6)

(a)Any loss sustained upon the repayment of the amount referred to in subsection (5) shall not be allowed as a deduction from the taxpayer’s income under the provisions of subsection (1) unless the Minister is satisfied that in obtaining the loan or advance which was obtained, as contemplated in subsection (5), the obtaining of the loan or advance was not arranged solely or mainly for the purpose of benefiting by a deduction from income: Provided that the Minister may authorize that such loss be carried forward to a subsequent year of assessment in order to be dealt with in such manner and in such circumstances as the Minister may direct.

(b)Any decision of the Minister in the exercise of his discretion under paragraph (a) shall be subject to objection and appeal.

(7)There shall be allowed as a deduction from the income of any taxpayer who has obtained foreign currency under a forward exchange contract and has utilized such currency for a purpose contemplated in subsection (1), any premium or other consideration paid by him under such contract for the purpose of obtaining such currency and which is not deductible from his income under any other provision of this Act.

(8)For the purposes of this section -“associated company”, in relation to another company, means a company which, in the opinion of the Minister, is associated with such other company by reason of the fact that both companies are managed or controlled directly or indirectly by substantially the same persons;“forward exchange contract” means any agreement with an authorized dealer in foreign currencies in Namibia, where currency of Namibia is exchanged for a foreign currency at some future date at a specified rate of exchange.[Section 25A is inserted by AG 10 of 1985, with this insertion deemed to have come into force on 1 March 1981 in the case of any person other than a company, and, in the case of any company, from the beginning of the first financial year of such company ending on or after 1 March 1982 (section 8(2) of AG 10 of 1985).]

26. Income of beneficiaries and estates of deceased persons

(1)Any income received by or accrued to or in favour of any person in his capacity as executor of the estate of a deceased person, and any amount so received or accrued which would have been income in the hands of the deceased person had it been received by or accrued to or in favour of such deceased person during his lifetime, shall, to the extent that the Minister is satisfied that such income or amount has been derived for the immediate, or future benefit of any ascertained heir or legatee of such deceased person, be deemed to be income received by or accrued to such heir or legatee, and shall, to the extent that the Minister is not so satisfied, be deemed to be income of the estate of such deceased person.

(2)So much of the amount of any expenditure incurred by or on behalf of the estate of any deceased person during any year of assessment as, in the opinion of the Minister, relates to any amount of income deemed to be income received by or accrued to an heir or legatee of such deceased person in terms of subsection (1) shall -

(a)not be taken into account in the determination of the taxable income of such estate; and

(b)be deemed to be expenditure incurred by such heir or legatee during such year, and shall, to the extent that the deduction of expenditure of the same nature is authorised by this Act, be taken into account in the determination of the taxable income of such heir or legatee.

(3)Nothing in subsection (1) shall be construed as imposing liability for tax in respect of the same amount both in the hands of the estate or heir or legatee of a deceased person, and in the hands of such deceased person.

(4)The decision of the Minister in the exercise of his discretion under subsection (1) or (2) shall he subject to objection and appeal.

27. Determination of taxable income derived from farming

The taxable income of any person carrying on pastoral, agricultural or other farming operations shall, in so far as it is derived from such operations, be determined in accordance with the provisions of this Act but subject to the provisions of Schedule 1.

28. ***

[section 28 deleted by Act 8 of 1987]

29. Persons carrying on business which extends beyond Namibia

When the business of any person, other than any person in respect of whose business outside Namibia special provision is made under this Act, extends to any country outside Namibia, the taxable income or assessed loss of such person shall be a sum which shall bear the same proportion to his total net profits or total loss from all sources, as the case may be, calculated in the manner provided in this Act for the determination of taxable income or assessed loss, as his assets in Namibia bear to his total assets: Provided that if accounts satisfactory to the Minister can be furnished, the Minister or the taxpayer may claim that the actual taxable income derived from sources within Namibia or loss incurred within Namibia shall be assessed in the manner otherwise provided in this Act.

30. Assessment of persons not ordinarily resident in Namibia who derive income from film business

Where any person who is not ordinarily resident in Namibia derives income under or by virtue of any contract or agreement with any other person in relation to the carrying on in Namibia by such other person of any business of distributing, exhibiting or exploiting motion picture films, or of leasing such films to other persons, or of licensing other persons to exhibit or display such films, or in relation to the acquisition of any advertising matter for use in connection with such films, such first-mentioned person shall be deemed to have derived under or by virtue of such contract or agreement a taxable income equal to an amount arrived at by deducting from an amount equal to ten per cent of the income derived by him as aforesaid any expenditure and losses (other than expenditure or losses of a capital nature) actually incurred by him in Namibia during the year of assessment under or by virtue of such contract or agreement.

31. Determination of taxable income of co-operative societies and companies

(1)In the determination of the taxable income of any co-operative trading society, as defined in the Co-operative Societies Ordinance, 1946 (Ordinance 15 of 1946), derived by that society from its transactions, whether with persons who are members or with persons who are not members of the society, the amount of any bonus distributed in any year of assessment to its members by any such society which is a closed society as defined in section 97 of that Ordinance shall be allowed as a deduction from the income of that society in so far as such bonus does not exceed an amount equivalent to one-tenth of the aggregate value of the business of such society with its members during such year of assessment, but no such deduction shall be allowed in the case of any such co-operative trading society which is not such a closed society.

(2)In the determination of the taxable income of any agricultural co-operative, there shall be allowed as deductions from the income of such agricultural co-operative for the year of assessment in question the amounts of any profits distributed by it during the specified period in relation to the year of assessment by way of bonuses to persons entitled to participate in such distribution: Provided that the amounts allowed as deductions under this subsection shall not in the aggregate exceed an amount equal to the taxable income of such agricultural co-operative for the year of assessment, as calculated before allowing any deductions under this subsection and before setting off any balance of assessed loss brought forward from a previous year of assessment.

(3)

(a)The full amount of any bonus distributed by any agricultural co-operative shall, to the extent that such amount qualifies for deduction from the income of such co-operative under subsection (2), be included in the gross income of the person who has become entitled thereto and shall be deemed to have accrued to such person on the date of the distribution of the bonus by such co-operative.

(b)For the purposes of this section the amount of any bonus distributed by way of capitalization shares or bonus debentures or securities shall be deemed to be the nominal value of such shares, debentures or securities, as the case may be.

(4)In this section -“agricultural co-operative” means any co-operative agricultural society or company or any farmers’ special co-operative company, as defined in the Co-operative Societies Ordinance, 1946;“bonus” means any amount distributed by any co-operative society or company referred to in this section out of its profits or surplus for any year of assessment, whether such amount is distributed in cash or by way of a credit or an award of capitalization shares or bonus debentures or securities, if such amount -

(a)is divided among the persons entitled thereto in such manner that the amount accruing to each such person is determined in accordance with the value of the business transactions between such society or company and such person; and

(b)is distributed during the specified period in relation to such year of assessment.

32. Determination of taxable income derived from insurance business

(1)Notwithstanding anything contained in this Act the taxable income derived from the carrying on of long-term insurance business by any taxpayer who carries on such business in Namibia (whether on mutual principles or otherwise), shall be deemed to be an amount equivalent to forty per cent of the sum of -[introductory phrase of section 32 amended by Act 8 of 1987]

(a)the gross amounts which the Minister is satisfied have been derived by the taxpayer during the year of assessment from the investment (including the letting of any property) of so much of his funds as are invested within or outside Namibia in respect of any long-term insurance business carried on by him in Namibia and of so much of his funds as are invested within Namibia in respect of any long-term insurance business carried on by him outside Namibia, but excluding -

(i)amounts proved to the satisfaction of the Minister to have been derived by the taxpayer from the investment of funds attributable to any long-term insurance business carried on by him or her in Namibia with any pension fund, provident fund or retirement annuity fund;[subparagraph (i) amended by Act 10 of 1993]

(ii)amounts proved to the satisfaction of the Minister to have been derived by the taxpayer from the investment of funds attributable to individual annuity contracts entered into by him in respect of which annuities are being paid and which are not connected with any business carried on by him in Namibia with any fund referred to in subparagraph (i); and

(iii)interest on the loan portion of the normal tax imposed under any income tax law; and

(b)where the taxpayer is a company, the gross amounts which have been derived by the taxpayer during the year of assessment by way of remuneration for managerial or secretarial or other services from subsidiary companies of the taxpayer (including any company in which the taxpayer is directly or indirectly interested, if the beneficial interest of the taxpayer in the issued share capital or the issued equity share capital of such company is a direct interest or is equivalent to a direct interest, in at least ten per cent of such issued share capital or such equity share capital, but excluding any company the sole or principal function of which is, in the opinion of the Minister, the rendering of services).

(2)Subject to the provisions of this Act the taxable income derived by any taxpayer from the carrying on in Namibia of short-term insurance business (whether on mutal principles or otherwise) shall be determined by charging against the sum of all premiums (including premiums on reinsurance) received by or accrued to such taxpayer in respect of the insurance of any risk, and other amounts derived from the carrying on of such business of insurance in Namibia, the sum of -[The word “mutual” in the phrase “mutual principles” is misspelt in the OfficialGazette, as reproduced above.]

(a)the total amount of the liability incurred in respect of premiums on reinsurance;

(b)the total amount of the liability incurred in respect of any claims during the year of assessment in respect of that business of insurance, less the value of any claims recovered or recoverable under any contract of insurance, guarantee, security or indemnity;

(c)the expenditure, not being expenditure falling under paragraph (a) or (b), incurred in respect of that business of insurance;

(d)such allowance as may be made each year by the Minister in respect of unexpired risks: Provided that the allowance granted under this paragraph in respect of any year of assessment shall be included in the income of the taxpayer in the following year of assessment, and for that purpose any allowance granted in terms of the corresponding provisions of any previous income tax law shall be deemed to be an allowance which was granted under this paragraph;

(e)such allowance as may be made each year by the Minister in respect of claims which have been intimated but not paid: Provided that the allowance granted under this paragraph in respect of any year of assessment shall be included in the income of the taxpayer in the following year of assessment, and for that purpose any allowance granted in terms of the corresponding provisions of any previous income tax law shall be deemed to be an allowance which was granted under this paragraph; and

(f)such allowance as may be made each year by the Minister in respect of claims which have not been intimated or paid: Provided that the allowance granted under this paragraph in respect of any year of assessment shall be included in the income of the taxpayer in the following year of assessment and for that purpose any allowance granted in terms of the corresponding provisions of any previous income tax law shall be deemed to be an allowance which was granted under this paragraph.

(3)Nothing in this section contained shall be construed as relieving any taxpayer from the obligation to render returns of any income derived otherwise than from the carrying on of long-term or short-term insurance business or in the form of dividends (notwithstanding the inclusion of such dividends or of a portion thereof in the gross amounts referred to in subsection (1)(a)) or from any liability for taxation in respect of any taxable income so derived or as depriving the taxpayer of the right to set off against the taxable income derived from the business of insurance any loss incurred in respect of any other business or any balance of loss so incurred which the taxpayer would be entitled to set off under the provisions of section 21.

(4)In this section -“insurance” includes reinsurance;“long-term insurance business” means long-term insurance business as defined in the Insurance Act, 1943 (Act 27 of 1943), and includes any business which is for the purposes of the said Act dealt with by the Registrar of Insurance as long-term insurance business and any business which in the opinion of the Minister is medical aid insurance business conducted on a non-cancellable basis;[The Insurance Act 27 of 1943 has been replaced by the Short-term Insurance Act 4 of 1998 and the Long-term Insurance Act 5 of 1998.]“short-term insurance business” means any insurance business other than long-term insurance business.

33. Assessments on transfer of business undertaking by foreign company to South West African subsidiary

If the Minister is satisfied that the circumstances warrant a concession and it is proved to his satisfaction -

(a)that any company (hereinafter referred to as the subsidiary) which is incorporated, managed and controlled in Namibia has under an arrangement with any other company (hereinafter referred to as the foreign company) which is incorporated, managed and controlled outside Namibia, acquired all the assets and assumed all the liabilities of the foreign company relating to any industrial, commercial or other business undertaking of the foreign company in Namibia which has been transferred by the foreign company to the subsidiary as a going concern; and

(b)that at the time the arrangement was implemented, all the issued shares of the subsidiary were held for its own benefit by the foriegn company or a company which was incorporated, managed and controlled outside Namibia and was controlled by or controlled the foreign company,

[The word “foreign” in the phrase “foreign company” is misspelt in the OfficialGazette in its first use in paragraph (b), as reproduced above.]any taxable income derived or any assessed loss incurred by the foreign company prior to the discontinuance by it of the said undertaking and any taxable income derived or assessed loss incurred by the subsidiary after the transfer to it of such undertaking shall, subject to any conditions imposed by the Minister, be determined in accordance with the provisions of this act as though, so far as the foreign company is concerned, such undertaking had not been discontinued by it and, so far as the subsidiary is concerned, such undertaking had belonged to and had been carried on by it prior to the transfer to it of such undertaking.

34. Assessment of owners or charterers of ships or aircraft not ordinarily resident or registered, managed or controlled in Namibia

(1)Any person (not being a person ordinarily resident in Namibia or a domestic company) who embarks passengers or loads livestock, mails or goods in Namibia, as an owner or charterer of any ship or aircraft, shall be deemed to have derived therefrom (apart from any taxable income derived by him from other sources) a taxable income of twenty Namibia Dollar for every two hundred Namibia Dollar payable to him or to any agent on his behalf, whether the amount be payable in or outside Namibia, in respect of passengers, livestock, mails and goods so embarked or loaded, but the provisions of this section shall not apply to any such person who renders accounts which in the opinion of the Minister satisfactorily disclose the taxable income derived by him from the embarking of passengers or the loading of livestock, mails and goods as aforesaid.

(2)Where the person so embarking passengers or loading livestock, mails or goods has no recognized agent in Namibia other than the master of the ship or the pilot of the aircraft in connection with which any such amounts are payable, or where the agent fails to make returns of any such amounts payable in respect of any ship or aircraft -

(a)the Minister may make the assessment from such information as may be available to him;

(b)

Income Tax Act, 1981

Act 24 of 1981

Related documents

Income Tax Act, 1981

Act 24 of 1981

1. Interpretation

Chapter IAdministration

2. Administration of the Act

3. Exercise of powers and performance of duties

4. Preservation of secrecy

Chapter IIThe taxes

Part I – Normal tax

5. Levy of normal tax for the benefit of the State Revenue Fund and transfer of a part thereof to the revenue funds of representative authorities

5A. ***

5B. Special abatement in respect of manufacturers

6. Rates of normal tax

7. ***

8. Rebate in respect of any taxes on dividends payable to the government of any country other than Namibia

9. Rebate in respect of non-resident shareholders’ tax

10. Rebate in respect of foreign income taxes on royalties and similar income

11. Rebate in respect of diamond profits tax

12. When income is deemed to have accrued or to have been received

13. Date of receipt or accrual of antedated salaries or pensions and of certain retirement gratuities

14. Certain amounts to be included in income or taxable income

15. Circumstances in which amounts deemed to have accrued from sources within Namibia

16. Exemptions

16A. Taxation of housing benefits

16B. Exemption of capital element of purchased annuities

17. General deductions allowed in determination of taxable income

17A. ***

17B. ***

17C. Allowance in respect of profits attributable to the export of certain manufactured goods

17D. ***

17E. Youth internship allowance

18. Deductions from income derived from mining operations

19. Deduction of expenses incurred by a lessor of land let for farming purposes, in respect of soil conservation works

20. Deductions and set-off from income derived from dividends

21. Set-off of assessed losses

21A. Ring-fencing of assessed losses of certain trades

22. Amounts to be taken into account in respect of values of trading stocks

23. Schemes of arrangement involving trading stock

24. Deductions not allowed in determination of taxable income

25. Credit agreements providing for postponement of the passing of ownership

25A. Gains or losses on foreign exchange transactions

26. Income of beneficiaries and estates of deceased persons

27. Determination of taxable income derived from farming

28. ***

29. Persons carrying on business which extends beyond Namibia

30. Assessment of persons not ordinarily resident in Namibia who derive income from film business

31. Determination of taxable income of co-operative societies and companies

32. Determination of taxable income derived from insurance business

33. Assessments on transfer of business undertaking by foreign company to South West African subsidiary

34. Assessment of owners or charterers of ships or aircraft not ordinarily resident or registered, managed or controlled in Namibia

Chapter I
Administration

Chapter II
The taxes