VAT was introduced in Namibia on 27 November 2000 with the enactment of the Namibian Value Added Tax Act, 10 of 2000 (‘VAT Act’) to replace sales tax and additional sales levies. The VAT authority is Inland Revenue, a division of the Ministry of Finance.
Rates and scope
The standard VAT rate is 15% and applies to all supplies of goods and services not qualifying for the zero rate (0%), or an exemption. The effective VAT rate for the importation of items subject to 15% VAT will be 16.5%, due to a 10% upliftment factor.
The following transactions are generally subject to VAT:
the supply of goods and services for consideration within the territory of Namibia performed by a taxable person; and
the importation of goods by any person.
The following supplies are considered outside the scope of VAT:
provision of goods on consignment;
branch activities outside Namibia;
registration and issuing of a licence by a registering authority;
levying of tax or levies by the state or local/regional authorities under any Act of Parliament; and
any activity conducted by the state.
A business that has a turnover of N$200,000 or more per year is obliged to register.
A business can choose whether it wants to register if its turnover is below N$200,000.
Group registration No group registration is allowed.
A nonresident business must register for VAT if it is performing taxable activities in Namibia and the turnover exceeds N$200,000.
It is important to note that in order to register for VAT purposes, a business is required to prove that it has a Namibian bank account and that it has business premises in Namibia.
The VAT registration of a nonresident business does not necessarily create a permanent establishment for direct tax purposes.
A business should complete a VAT registration form, which can be obtained from Inland Revenue.
The VAT number is the first seven digits of the income tax number, followed by 015, i.e. 9999999 015. For the VAT import account, the VAT number is the first seven digits of the income tax number, followed by 016, i.e. 9999999 016.
Medical services will be zero-rated once the VAT Act has been amended to give effect to the
announcement made by the Minister of Finance during her Annual Budget Speech, 2009.
A registered person can only deregister after a period of two years of being registered.
Prices charged by a registered person in respect of a taxable supply are deemed to include the VAT payable on the supply.
Prices advertised or quoted by any registered person in respect of a taxable supply must include VAT and the registered person must state, in the advertisement or quotation, that the price includes VAT. If a person wishes to advertise or quote a price exclusive of VAT, he may nevertheless do so, provided that the VAT amount is also indicated.
Exemptions and zero-rating
Exempt supplies include (but are not limited to):
public transport of persons;
fringe benefits; and
supplies to nonresident heads of