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
- 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