Zero-rated supplies include (but are not limited to):
exportation of goods;
maize meal and mahango;
sunflower cooking oil, fresh and dried beans, fried out or processed animal fat used for the preparation of food, bread and cake flour(sifted and unsifted) and bread;*
international transport; and
erection, extension and sale of land and buildings for residential purposes.
Input tax allowed
The VAT paid or payable in respect of the import of goods and taxable supplies made to registered persons during the tax period in the course or furtherance of a taxable activity carried on by a registered person can be recovered as input tax.
Input tax claims may be made within a period limited to three years after the end of the tax period during which a taxpayer became entitled to that for the first time.
No input tax deduction is allowed in respect of exempt supplies.
Input tax expressly denied
VAT incurred relating to the following goods and services is specifically denied input VAT deduction:
passenger vehicles; and
subscriptions of a sports, social or
However, certain types of persons may deduct the input tax on passenger vehicles. They are:
persons dealing in or hiring out motor vehicles;
short-term insurers if the vehicle was acquired to indemnify a client under a short-term insurance contract;
but the subsequent sale of the vehicle will be subject to VAT; and
The VAT Act makes provision for only one apportionment method which should be utilised by persons rendering a mixture of taxable and exempt supplies. The method is based on the application of a turnover ratio using the turnover of the previous financial year as a basis (certain special rules apply to the banking sector). If the percentage of exempt supplies in relation to total supplies is less than 10%, the registered person does not have to apportion the input tax paid on its expenses.
Adjustments No special rules apply.
Preregistration and post- deregistration VAT
A registered person is allowed a deduction in the first tax period in which the person is registered, for input tax paid by the person on taxable supplies or imports of goods (in both cases other than capital goods) before becoming registered. This is subject to the following requirements:
the supply must have occurred not more than four months before the date of registration; and
the goods must be on hand at the date of registration.
A person whose VAT registration is cancelled shall be deemed to have made a taxable supply of any goods on hand at date of deregistration in respect of which that person has been allowed an input tax claim. The person is deemed to make that supply at the open market value of the goods concerned.
VAT is payable on the importation of goods at the greater of the free-on- board value plus the upliftment factor of 10% (effectively 16.5%), or the open- market value of the imported goods. Import VAT paid may be claimed back should the person be registered for VAT and render taxable supplies.
Only cash or Namibian bank guaranteed cheques are acceptable by Customs for payment of VAT on importation of goods, unless the importer has arranged for a VAT import account facility at Inland Revenue and the facility has been registered at Customs.
All imports are recorded electronically on the Customs Asycuda system. Inland Revenue has been linked to the Customs Asycuda system, making it possible to determine import VAT liability based on the reports of monthly imports produced by the Asycuda system.
VAT on imported services (the so-called reverse charge) is only levied to the extent that such imported services are utilised or consumed other than to make taxable supplies. VAT on imported services is levied at 15% of the value of the supply.
Essentially, only exempt or partially exempt taxpayers (for example banks and life insurers) are thus impacted
Milk and sugar will be added to the list of zero-rated services 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.