Taxing ­rendering ­services outside ­Namibia

28 July 2021 | Business

Stefan Swartz



Have you and your employer been in a position where the services you perform, as part of your trade, had to be performed to clients outside of Namibia?

What is the tax exposure in terms of the Income Tax Act 24 of 1981 for the employees who received income (e.g. remuneration) for these services rendered?

Namibia has a source-based tax system, which means that income from a source within Namibia or deemed to be within Namibia will be subject to tax in Namibia, unless a specific exemption is available. The Act makes provisions for specific inclusions in gross income and amounts deemed to be from a Namibian source.

In terms of Section 15(1)(f) of the Act, any income received by a person who is ordinarily resident in Namibia for any services rendered or work or labour done by such a person while temporary absent from Namibia (i.e. the services are rendered outside Namibia), will be deemed to be received from a Namibian source, irrespective from where the payment for such services are made.

From the above it is evident that Section 15(1)(f) has four conditions that must be met:

1. The taxpayer must be ordinarily resident in Namibia;

2. The taxpayer must be employed by an employer in Namibia and the income earned must be for services rendered or work or labour done for or on behalf of such employer;

3. The services or work or labour done must be rendered or done outside Namibia; and

4. The services must have been rendered or work done “during any temporary absence of such person from Namibia”.



TERMS

We have shed some light what is meant by “ordinarily resident” and “during any temporary absence of such person from Namibia” below.

“Ordinarily resident” is not defined in the Act and is therefore a question of fact. The employee may possibly be regarded as being ordinarily resident in Namibia to the extent that, amongst others, he/she calls Namibia his/her true home, if he/she has the intention to live here and to call it his/her true home and that Namibia is the place that he/she would return to after his/her travels.

The services must have been rendered or work done “during any temporary absence of such person from Namibia”. This is not defined in the Act and the taxpayer should look at the facts and circumstances on a case-by-case basis.

An excellent source to consider is the employment contract of the employee which will clearly state the terms of his/her employment and the time he/she will be required to work in Namibia and outside Namibia.

The portion of a taxpayer's remuneration relating to the services rendered outside of Namibia is deemed to be from a Namibian source and should be included in the taxpayer's taxable income if all four requirements listed above is met.

Stefan Swartz is the corporate tax manager at PwC Namibia. Contact him at [email protected]

Similar News

 

Heimstädt steering road safety

18 hours ago | Business

Rivaldo KavangaHorst Heimstädt is the CEO of the Namibia Road Safety Forum, a private organisation which does extensive work in the Southern African Development Community...

FNB to strengthen its support to MSMEs

18 hours ago | Business

PHILLEPUS UUSIKUProparco, a private sector financing arm of Agence Française de Développement Group (AFD Group), granted a EURIZ portfolio guarantee of N$ 68 million to...

Rising like a phoenix

18 hours ago | Business

Mariselle StofbergWilhelmine Mutorwa has used every opportunity she is given to become the best version of herself. For Wilhelmine Mutorwa, giving up has never been...

Digital marketing training underway countrywide

18 hours ago | Business

Michelline Nawatises The Namibia University of Science and Technology (NUST), through the Centre for Enterprise Development (CED) and in collaboration with the Deutsche Gesellschaft für...

COMPANY NEWS IN BRIEF

18 hours ago | Business

ABB lowers sales guidanceABB lowered its full-year sales outlook on Thursday, as the Swiss engineering and technology group became the latest company to flag shortages...

Startup Leo Canopus digitalising communities

1 day - 21 October 2021 | Business

STAFF REPORTERLeo Canopus was among the seven startups selected in early March, for an initiative by the Namibia Business Innovation Institute (NBII) titled the NBII...

Kapana Cook-Off competition winners crowned

1 day - 21 October 2021 | Business

STAFF REPORTERWindhoek resident, Kristy Shomongula, became the seventh winner of the Nedbank Kapana Cook-Off competition. The final which took place at Shanghai Park Lounge on...

COMPANY NEWS IN BRIEF

1 day - 21 October 2021 | Business

Halliburton posts Q3 profitUS oilfield firm Halliburton Co on Tuesday posted its third consecutive quarterly profit and said customer spending in the United States could...

Challenges ahead on ICT highway

2 days ago - 20 October 2021 | Business

Jo-Maré Duddy – Always on the look-out for a solid home for at least 45% of their assets under management, Namibian institutional investors will likely...

Understanding double taxation agreements

2 days ago - 20 October 2021 | Business

Anneri Lück - In my previous articles I gave an overview of some of the important considerations when operating across jurisdictions. One of the...

Latest News

Heimstädt steering road safety

18 hours ago | Business

Rivaldo KavangaHorst Heimstädt is the CEO of the Namibia Road Safety Forum, a private organisation which does extensive work in the Southern African Development Community...

FNB to strengthen its support...

18 hours ago | Business

PHILLEPUS UUSIKUProparco, a private sector financing arm of Agence Française de Développement Group (AFD Group), granted a EURIZ portfolio guarantee of N$ 68 million to...

Learners don maize sacks for...

18 hours ago | Education

TUYEIMO HAIDULA OSHAKATI Learners at Omuthiyagwiipundi Combined School in Omuthiya are forced to wear maize sacks each time they misbehave at...

Itula changed, says suspended Smith-Howard

18 hours ago | Politics

Staff Reporter WINDHOEKSuspended Independent Patriots for Change (IPC) Swakopmund constituency councillor Ciske Smith-Howard says her party leader, Dr Panduleni Itula, has become...

The face of the southern...

18 hours ago | People

Michelline Nawatises Victoria Ndemupa Muhuura was born in Wavis Bay. She attended at Andimba Toivo ya Toivo Secondary School in the Oshana Region, and...

Zozo’s Leather: Your dream product

18 hours ago | People

Rivaldo Kavanga Celesty Cupido worked in the tourism industry and realised over the years that many Namibian accommodation establishments do not showcase or sell...

Rising like a phoenix

18 hours ago | Business

Mariselle StofbergWilhelmine Mutorwa has used every opportunity she is given to become the best version of herself. For Wilhelmine Mutorwa, giving up has never been...

Africa calls for climate finance...

18 hours ago | Economics

ALESSANDRA PRENTICEAfrican countries want a new system to track funding from wealthy nations that are failing to meet a US$100-billion annual target to help the...

EDITORIAL: We are guilty of...

18 hours ago | Opinion

A lot needs to be discussed in our country – from race and sexual rights to abortion. The country can’t stop talking, even when such...

Load More