Best practice on staying VAT compliant

The Act on Value-Added Tax (VAT) contains several prescribed methods on treating VAT, accounting for VAT and declaring VAT. Considering the fast pace at which business is conducted daily, here are some useful tips on ensuring your business maintains momentum while being on the right side of the VAT Act. VAT remains one of the key sources of revenue for the country and staying compliant is a key element of any taxpayer.1. VAT-registered entities collect VAT (output tax) on behalf of povernment – please make sure that you pay it over on time, otherwise penalties and interest will be charged.2. All prices charged, advertised or quoted by a registered person must include VAT at the applicable rate. (Presently 15% for standard rated supplies). If no reference is made to VAT, the price will be deemed to be inclusive of VAT.3. VAT charged on supplies made (output tax) less VAT paid to your suppliers (input tax) equals the amount of VAT payable/refundable.4. You need a valid tax invoice with your full name and VAT number (of the supplier) indicated on it as proof of any input tax deductions which you want to make. You should also keep records of all your tax invoices and other records of transactions for at least five years.5. Goods exported to clients in an export country are charged with VAT at 0%. However, if delivery takes place in Namibia, you must charge VAT at 15% to your client. If your client is a registered person, the VAT charged may be deducted as input tax. If your client is not a registered person, and the goods are subsequently removed from the country, a claim for a refund of the VAT may be made at the offices of the VAT Refund Administrator (the VRA).6. You may not register for VAT or deduct any input tax on goods or services acquired to make exempt supplies, for private use or other non-taxable purposes. Also, as a general rule, input tax may not be deducted where the expense incurred is for the acquisition or rental of a passenger vehicle or entertainment, even if utilised for making taxable supplies.7. You are required to advise the Namibian Inland Revenue Department within 21 days of any changes in your registered particulars, including any change in your authorised representative, business address, banking details, trading name, or if you cease trading.8. If you have underpaid VAT as a result of a mistake, report it to your Namibian Inland Revenue office as soon as possible, rather than leaving it for their auditors to detect.9. You can pay your VAT with electronic funds transfer (EFT).10. It is important to submit returns on time. Penalty on late submission of a VAT or Import VAT return is N$100 per day. Penalty on late payment of VAT or Import VAT is 10% per month on tax payable, limited to 100%.I trust that the above will assist you in staying compliant as a responsible tax citizen.•Nelson Lucas is an associate director: indirect taxes at PwC Namibia. This series on tax is published in Market Watch bi-monthly on a Monday.

Best practice on staying VAT compliant

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Republikein 2025-11-17

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Best practice on staying VAT compliant

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Republikein 2025-11-17

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