Guide to Registering for Withholding Tax on Royalties in Namibia
Guide to registering for withholding tax on royalties in Namibia, including Namibia withholding tax rates, NamRA registration, royalty payments, non-resident services, tax return submission and payment deadlines.
If a Namibian business pays royalties to a non-resident, it may have an obligation to deduct withholding tax and pay the amount withheld to the Namibia Revenue Agency (NamRA). This commonly applies to payments connected with intellectual property, trademarks, patents, copyright, technical or commercial knowledge, and certain industrial, commercial or scientific equipment.
Understanding the registration process is important because withholding tax is not simply a matter of deducting money from a payment. The payer must identify the correct tax obligation, apply the applicable withholding tax rates, submit the relevant return and make the withholding tax payments within the prescribed period.
NamRA’s official guidance confirms that royalties paid to non-residents are subject to withholding tax at 10%. Payment and tax return submission are generally due within 20 days after the end of the month in which the amount was withheld. NamRA’s withholding tax guidance provides the official tax-type information.
What Is Withholding Tax on Royalties in Namibia?
Withholding tax on royalties is a tax deducted by the Namibian payer when certain royalty amounts are paid or become payable to a non-resident.
Instead of the non-resident receiving the entire gross amount and separately paying the Namibian tax, the local payer is generally responsible for withholding the required amount and remitting it to NamRA.
Examples of royalty-related payments can include amounts for the use or right to use:
- Patents
- Trademarks
- Copyright
- Designs
- Models
- Plans
- Formulas
- Processes
- Industrial equipment
- Commercial equipment
- Scientific equipment
- Certain technical, industrial or commercial knowledge
The precise classification of a payment matters. A contract described as a “licence fee,” “technical fee” or another commercial term may still need to be examined to determine whether it falls within the statutory definition of a royalty.
Current tax guidance confirms that Namibia’s royalty withholding tax applies when a Namibian company pays a royalty to a non-resident and that the standard rate is 10%.
Who Needs to Register for Withholding Tax?
The obligation generally falls on the Namibian resident payer, rather than the foreign recipient.
For example, suppose a Namibian company licenses software or intellectual property from a company based outside Namibia. The Namibian company should consider whether the payment constitutes a royalty and whether withholding tax must be deducted.
This means businesses making regular non-resident payments should establish their relevant NamRA tax obligations before making payments.
A business that is already registered for income tax should ensure that its tax registration and ITAS profile correctly reflect the withholding tax obligations applicable to its activities.
NamRA’s ITAS system provides online access for managing tax obligations, while registration and compliance information is also available through NamRA’s official channels. NamRA’s registration and compliance information can also help taxpayers identify the appropriate registration requirements.
Businesses that need to establish their broader NamRA registration requirements should ensure that their taxpayer profile is properly set up before dealing with additional tax types.
Withholding Tax Rates on Royalties
The standard withholding tax rate for royalties paid to non-residents is 10%.
For example, if a Namibian business has a royalty liability of N$100,000 to a non-resident and the domestic 10% rate applies:
| Description | Amount |
|---|---|
| Gross royalty | N$100,000 |
| Withholding tax at 10% | N$10,000 |
| Amount paid to non-resident | N$90,000 |
| Amount remitted to NamRA | N$10,000 |
The tax is calculated on the relevant gross royalty amount under the applicable rules.
PwC’s Namibia tax summary, reviewed in July 2026, likewise states that royalties paid by a Namibian company to a non-resident are subject to a 10% withholding tax. It also notes that a double taxation agreement (DTA) may provide relief in qualifying circumstances. PwC’s Namibia withholding-tax summary provides a current overview of the rules and treaty considerations.
How to Register for Withholding Tax on Royalties
1. Register for Income Tax With NamRA
A business should first have the appropriate tax registration with NamRA.
For an entity, the registration process normally involves providing the information required to establish the taxpayer and its activities. The taxpayer should receive or have access to its Taxpayer Identification Number (TIN) for interacting with the tax authority and ITAS.
Income tax registration is important because withholding tax compliance is connected to the taxpayer’s wider tax profile.
Businesses should also keep their registration information current, particularly where there are changes to the entity, responsible persons, business activities or contact information.
For businesses that have not yet completed their income-tax setup, this guide to registering a business for income tax in Namibia provides additional information about the process.
Individuals have separate tax-registration considerations, and the step-by-step guide to registering as an individual taxpayer in Namibia explains the process for individual taxpayers.
2. Obtain Access to ITAS
NamRA uses the Integrated Tax Administration System (ITAS) for electronic tax administration.
Once the taxpayer has the necessary credentials, ITAS can be used for relevant registration, filing and tax administration functions.
When making electronic payments, accurate taxpayer and tax-type information is important. The ITAS payment process requires information such as the relevant payment type, registration office information, TIN and tax type. The FNB Namibia ITAS User Guide provides guidance on the information used when processing ITAS-related payments.
Businesses should also ensure that the banking information held on their taxpayer profile remains accurate. Information about updating taxpayer bank details on the NamRA portal can help with maintaining accurate records.
Where required, taxpayers can also review the process for linking a bank account to a NamRA tax profile.
3. Identify the Relevant Withholding Tax Obligation
Registration should correspond to the actual transaction.
A business should determine whether it is dealing with:
- Royalty payments
- Withholding tax on services
- Interest withholding tax
- Dividend or non-resident shareholders tax
- Another tax obligation
This distinction is important because different types of payments can have different statutory rules and rates.
For example, a payment to a foreign consultant may fall under withholding tax on services rather than royalty withholding tax. Similarly, interest paid to a non-resident can be subject to a separate withholding tax regime.
Businesses making foreign service payments can review the guide to registering for non-resident withholding tax on services to understand how that category differs from royalty withholding tax.
Dividend payments to non-resident shareholders are addressed separately through Non-Resident Shareholders Tax registration.
4. Record the Non-Resident Payment
The payer should maintain documentation supporting the transaction.
Useful records can include:
- The signed agreement
- Licence or royalty agreement
- Supplier or recipient information
- Tax residency information
- Invoices
- Payment records
- Calculation of the withholding tax
- Evidence of the amount remitted
- Relevant tax returns
- Correspondence concerning treaty relief
Keeping these documents makes it easier to demonstrate how the amount was classified and how the tax was calculated.
How to Calculate Royalty Withholding Tax
The basic calculation under the standard domestic rate is straightforward:
Withholding tax = Gross royalty amount × 10%
For example:
N$250,000 × 10% = N$25,000
The Namibian payer would generally deduct N$25,000 and pay N$225,000 to the non-resident, while the N$25,000 withholding tax would be accounted for to NamRA.
However, businesses should not automatically apply 10% to every payment described as a royalty. The nature of the payment, the recipient’s status and any applicable treaty provisions must be considered.
When Is Withholding Tax Due?
The tax payment due date is an important part of compliance.
NamRA’s current ITAS guidance states that withholding tax on royalties, services and other specified withholding taxes is generally due within 20 days after the end of the month during which the amount was withheld.
PwC’s July 2026 guidance similarly states that withholding tax on royalties is due within 20 days after the end of the month in which the liability for the royalty payment was incurred.
Businesses should therefore avoid treating the due date as 20 days from the date of the invoice or 20 days from the date of the bank transfer without first checking the specific statutory rule applicable to the transaction.
Filing the Withholding Tax Return
Registration is only the beginning of compliance.
Where withholding tax applies, the payer must generally complete the appropriate tax return submission and pay the amount withheld to NamRA within the applicable deadline.
A practical monthly process can look like this:
- Review payments made or liabilities incurred during the month.
- Identify payments involving non-residents.
- Determine whether each payment is a royalty, service fee, interest payment or another category.
- Confirm the applicable withholding tax rate.
- Calculate the tax to be withheld.
- Deduct the tax from the payment where required.
- Submit the appropriate return through the applicable NamRA system.
- Pay the withholding tax using the correct payment details.
- Keep evidence of the filing and payment.
- Reconcile the transaction with the accounting records.
This process is particularly important for companies making recurring payments to foreign software providers, licensors, consultants, technology companies or intellectual-property owners.
Businesses that have other tax obligations should also understand how they fit into the wider NamRA compliance framework. For example, VAT registration with NamRA may be relevant where the business meets the applicable VAT requirements.
Withholding Tax on Services vs Royalties
Royalty payments should not be confused with withholding tax on services.
Namibian rules can require a resident person paying certain management, consultancy, entertainment and similar fees to a non-resident to withhold tax. NamRA’s ITAS guidance identifies a 10% rate for specified services, while certain categories can have different treatment.
For example, consider these two transactions:
Example A — Royalty
A Namibian company pays a foreign company for the right to use copyrighted software or intellectual property.
Example B — Consultancy
A Namibian company pays a foreign consultant for technical or management services.
Although both payments involve a foreign recipient, they may fall under different provisions.
NamRA’s withholding tax on services guidance specifically addresses payments for services rendered by non-residents and the associated registration and payment requirements.
The contractual substance of the transaction should therefore be reviewed rather than relying solely on the description used on an invoice.
Interest Withholding Tax
Interest withholding tax is another separate category.
Current Namibia tax guidance indicates that interest paid to a non-resident can be subject to withholding tax at 10%. The timing rules can differ from those applying to royalties.
Businesses making foreign loan repayments should therefore examine the interest component separately from the principal repayment.
For example, a payment under a foreign loan may contain:
- Principal
- Interest
- Bank charges
- Other fees
Each component should be reviewed to determine its appropriate tax treatment.
Dividend Withholding Tax
Payments to non-resident shareholders can also create withholding tax obligations.
Namibia refers to this as Non-Resident Shareholders Tax (NRST). NamRA’s current guidance states that NRST applies to dividends declared by a company to a shareholder who is not a Namibian resident. The standard rate is 10% where the beneficial shareholding company holds at least 25% of the capital, and 20% in other cases, subject to applicable rules and treaty relief.
This is different from withholding tax on royalties.
A company should therefore avoid treating every payment to a foreign company as falling under one generic withholding tax category.
Double Taxation Agreements and Treaty Relief
A key issue for international transactions is whether Namibia has a double taxation agreement with the country where the non-resident recipient is tax resident.
A treaty may reduce the domestic withholding tax rate or provide other relief where its conditions are satisfied.
However, treaty relief should not be assumed simply because the recipient is based in a treaty country. The relevant treaty, recipient status, beneficial ownership requirements and documentation should be examined before applying a reduced rate.
PwC’s current Namibia guidance identifies treaty-specific differences for dividends, interest, royalties and management or consultancy fees.
For significant royalty payments, professional tax advice can help establish whether domestic withholding tax or a treaty provision applies.
What Documents Should You Keep?
A strong withholding-tax compliance file should allow an independent reviewer to understand the transaction from beginning to end.
Consider retaining:
- Royalty or licence agreement
- Invoice from the non-resident
- Description of the intellectual property or rights involved
- Recipient’s legal name and address
- Recipient’s country of tax residence
- Proof of payment
- Withholding tax calculation
- ITAS return confirmation
- NamRA payment confirmation
- Relevant correspondence
- Treaty documentation, where applicable
- Tax residency certificate, where required
These records can be particularly valuable if NamRA requests supporting information during a compliance review.
If a taxpayer needs formal representation for a Namibian tax matter, the process for assigning a special power of attorney for Namibian tax matters should also be considered where applicable.
What Happens If Withholding Tax Is Paid Late?
Late compliance can result in additional costs.
NamRA’s ITAS guidance states that a penalty of 10% and interest of 20% of the withholding tax amount can apply to late payment for each month or part of a month, subject to the stated limitation relating to unpaid tax.
Businesses should therefore build the monthly filing and payment deadline into their accounting procedures.
A useful internal control is to create a monthly checklist covering:
- Non-resident payments
- Tax classification
- Withholding calculation
- Return submission
- Payment
- Reconciliation
- Supporting documentation
This reduces the risk of overlooking a transaction.
Businesses seeking evidence of their compliance status can also review the process for applying for a NamRA certificate of good standing.
NamRA Tax Compliance and Income Tax Registration
Withholding tax should be considered as part of the company’s wider tax obligations rather than as an isolated registration.
Businesses may also have obligations relating to:
- Income tax
- Value-added tax
- Employees’ tax
- Withholding taxes
- Non-resident shareholders tax
- Other industry-specific taxes or regulatory requirements
Namibia uses a source-based tax system, meaning income from a Namibian source or deemed Namibian source can generally fall within the Namibian tax system.
Businesses should therefore assess the tax consequences of cross-border transactions before entering into contracts with foreign suppliers.
The PKF FCS Namibia income-tax guide also discusses tax registration requirements and supporting information for individuals and entities.
Businesses with employees should separately consider registering as an employer for PAYE in Namibia because PAYE is a different tax obligation from withholding tax on royalties.
Practical Example: Paying a Foreign Software Licensor
Assume a Namibian company enters into a licensing agreement with a foreign company and owes N$500,000 for rights that constitute royalties under the applicable rules.
If the domestic 10% withholding rate applies:
- Gross royalty: N$500,000
- Withholding tax: N$50,000
- Net payment to foreign recipient: N$450,000
- Amount accounted for to NamRA: N$50,000
The company should then complete the relevant withholding tax return and make payment within the applicable deadline.
If a treaty may apply, the company should first establish whether the treaty changes the rate or otherwise affects the withholding obligation.
Common Mistakes to Avoid
Treating all foreign payments the same
A payment for software rights may have different tax treatment from a payment for consultancy services. Classification matters.
Ignoring the recipient’s tax residence
The non-resident’s country of residence can be important when determining whether a DTA applies.
Applying a treaty rate without checking its requirements
A treaty does not automatically mean that the domestic rate can be ignored. The relevant conditions must be satisfied.
Filing but not paying
Submitting a return does not replace the obligation to pay the amount withheld.
Paying but failing to file
The payment and return obligations should both be completed.
Keeping inadequate records
A company should be able to explain why a payment was treated as a royalty and how the withholding amount was calculated.
Waiting until year-end
Withholding tax compliance is generally a recurring obligation. Businesses making regular non-resident payments should incorporate it into their monthly accounting procedures.
Frequently Asked Questions
Is withholding tax on royalties 10% in Namibia?
The standard domestic withholding tax rate on royalties paid to non-residents is 10%. However, an applicable double taxation agreement may alter the rate where its requirements are satisfied.
When must royalty withholding tax be paid to NamRA?
NamRA’s current guidance states that payment and return submission are generally due within 20 days after the end of the month during which the amount was withheld.
Does withholding tax apply to services paid to foreign companies?
It can. Namibia has separate rules for certain management, consultancy, entertainment and similar services rendered by non-residents. The applicable rate and treaty treatment depend on the nature of the service and the circumstances of the recipient.