Question $230$ Marks

Part A $10$ Marks

$($a$)$ A German company signs a deed of sale in Namibia for the delivery of German

manufactured goods in Canada. Explain where the income is taxable and quote

the respective section number.

$(2$ marks$)$

$($b$)$ A Namibian resident receives a Royalty from an English publisher in terms of a contract negotiated in England for a book written in Namibia.

Explain where the royalty would be taxable and use case law where applicable.

$(4$ marks$)$

$($c$)$ Mr Farrow $($a Namibian resident$)$ having worked his last $5$ years of

employment in Namibia, has received during the tax year an annual pension of N$ $95,000.$ This was from an American company situated in the Silicon Valley, for whom he had worked for $25$ years in total. Indicate whether the above pension received is taxable and if so$,$ how much? $(4$marks$)$

Part B $10$ Marks

Carefully scrutinize the following statements presented to you and indicate whether they

are True or False. Support your answer with a brief reason.

$1.$ An amount distributed as a reduction of profit is not a dividend.

$2.$ Mr Edward $($Eddy$)$ is the Managing Director of Ocean Baskets CC and owns $51\%$ of

this company$$s shareholding. During the current year of assessment Eddy receivedN$$25000$ from his employer by virtue of his shareholding in Ocean Basket. The amounreceived by Eddy does not constitute a dividend because he received it from his

employer.

$3.$ Do It Ltd is a Namibian private company located in the centre of Windhoek. During

$2022,$ Do It Ltd received interest of N$$15000$ from Standard Bank Namibia. The interest

received is subject to withholding tax in terms of section $34$A of the income tax Act.

$4.$ A natural person received interest from Nampost during the current year of

assessment. Such interest is subject to withholding tax.

$5.$ Mr Simon Edward is a $49$ years old resident of the Republic of Namibia. During the

$2022$ year of assessment, Mr Simon died due to Covid$-19$ related medical conditions.

The diseased estate of Mr Simon received interest worth N$$55000$ from the

government. The interest received by Simon$$s Estate is subject to withholding tax.

$6.$ Trading stock acquired at no consideration is deemed to have a nil value.

Part C $10$ Marks

A Lease contract was signed on $1$ January $2016$ for the lease of business premises.

The contract is for a period of $20$ years. The lessee must pay a premium of N$$200000$

as well as annual rent of N$$72000$ payable per month to the lessor.

Required:

$1.$ How much is the lease premium allowance deduction from $1$ January $2016$ up to $28$

February $282035?(4$ Marks$)$

$2.$ How much is the lease premium and rent deduction for the year ended $28$ February

$2036?(2$ Marks$)$

$3.$ How much is the lease premium and rent which are included in the gross income of

the lessor on $28$ February $2016?(2$ Marks$)$

$4.$ What are the requirements for lease premiums to be deductible: $(2$ Marks$)$