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6.5. Deduction of Cross-Border Payments and Non-Deductible Expenses

Expenses incurred for the purpose of business are deductible unless they are specifically disallowed or are of capital nature. However, realized foreign-exchange losses, including capital losses, are deductible.

Under the standard general rules, a business expense is deductible for tax purposes only if the expense:

  • was incurred for the purposes of the business and not of a capital nature;
  • results in the reduction of the net assets of the enterprise; and
  • its deductibility is not excluded or limited by a specific tax law provision.

The following general expense types are not deductible or have limited deductibility for tax purposes in Namibia:

  • Personal expenses
  • Goodwill
  • Capital expenditure
  • Corporate income tax, tax penalties, and fines levied by the tax authorities
  • Charitable donations made to an unregistered welfare or educational organization
  • Expenditure incurred on a scientific research undertaken for an unapproved institution
  • Expenses incurred by branch towards payment of fees to its foreign head office