Tax First Newsletter

Providing you with informed commentary on current developments in the local tax and business arena.

Tax First Newsletter | May 2024

The ABC of Joint Ventures (“JV”) and It’s Income Tax Compliance

In simple terms, a joint venture is when two (or more) businesses combine their resources so that they can reach a common goal. We typically see JV’s in the construction industry (e.g. construction of roads). However, a JV can be created for any industry/goal.

Generally there are 2 types of JV’s, namely incorporated JVs (i.e. a legally established entity), or an unincorporated JV, whereby the JV is established by means of a contractual agreement between the JV partners.

Distribution of the profit share and accounting for income tax

For incorporated JV’s, the entity will be required to register for income tax with the Namibian Revenue Agency (“NamRA”). It will prepare its own set of Annual Financial Statements, tax calculation and tax returns, etc.

For unincorporated JV’s, however, income tax registration is not possible. The JV is required to have a set of management accounts and prepare its own tax calculation, whereby its taxable income / loss will be carried by the respective JV partners in proportion to their profit share in the JV. Accordingly, any taxes due / losses created would be borne / enjoyed by respective JV partners. This means that a portion of the taxable income / loss arising from the JV should be included in the respective partners taxable income and will be based on their percentage profit share in the agreement.

To read the full article, download the newsletter below.

Also in this issue:

  • Tax Tip: Employer and Employee Contributions to Pension, Provident, and Retirement Annuities
  • PwC Business School Calendar | May 2024
  • Exciting News: PwC Namibia’s Windhoek office is moving to a new location
  • Tax Calendar | May 2024

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Chantell Husselmann

Chantell Husselmann

Country Senior Partner, PwC Namibia

Tel: +264 61 284 1327

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Johan Nel

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Ansie Rossouw

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Anneri Lück

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