Funds often acquire services and products from foreign vendors such as software, consulting services, training etcetera. Such transactions may have VAT and Withholding Tax

implications read together with the provisions of any double taxation agreement in force between Namibia and the other tax jurisdiction.

Failure to comply with the VAT Act and the Income Tax Act, with regard to Withholding Tax will expose the fund to penalties and late payment interest.

As fund administrators we do not purport to be tax experts. Such expertise can typically be sourced from Namibian audit firms. In instances where invoices are presented to us

for payment in respect of goods or services acquired from a foreign vendor, we presume that the fund has considered the potential implication of VAT (import or normal VAT) and

of Withholding Tax the fund may be liable for, as well as any relief granted by the double taxation agreement between the two countries concerned.

The purchase of software from a foreign vendor in our understanding represents a VATable import and VAT should be paid at the same time payment is affected. The cost of

attending training or seminars outside Namibia in our understanding does not represent a VATable import and VAT, if applicable in the foreign country, should be raised by the

foreign vendor. Trustee fees and trainer fees payable to a foreign resident attract Withholding Tax unless relief is provided by the double taxation agreement.

On the topic of Withholding Tax, PWC recently published withholding tax guidelines concerning South African suppliers. Download the guidelines in PDF format here...

Important notice and disclaimer
This article summarises the understanding, observation and notes of the author and lays no claim on accuracy, correctness or completeness. Retirement Fund Solutions Namibia (Pty) Ltd does not accept any liability for the content of this contribution and no decision should be taken on the basis of the information contained herein before having confirmed the detail with the relevant party. Any views expressed herein are those of the author and not necessarily those of Retirement Fund Solutions.