Withholding tax rates may be modified by an applicable double taxation agreement. The tax thus withheld is final. How is a person defined as a resident of Botswana for tax purposes? The Treaty shall enter into force as soon as the instruments of ratification have been exchanged. It shall apply to Botswana 30 days after its entry into force in respect of withholding taxes and from 1 July of the year following its entry into force in respect of other taxes. In Kenya, the Treaty shall apply from 1 January of the year following its entry into force. Is there a minimum number of days before local tax authorities apply the economic employer approach? If so, what is the number of days of minimus? Rental income is classified as business income. All rental income, less expenses incurred wholly, exclusively and necessarily in the production of such rental income, is taxed at individual tax rates. Eligible business income is aggregated with employment and short-term work permits can be issued up to a maximum of 3 months. If an applicant wishes to extend beyond this period, the Ministry of Labour will ask for long-term approval. A long-term work and residence permit is issued for periods of more than 6 months to about 5 years. The focus is on localization and evidence of a lack of resources in the local market. Once a long-term or short-term permit has been issued, the person should apply for an immigration exemption so that they can reside in the country or jurisdiction for the same period as the work permit.

The agreement covers Botswana`s income tax, including capital gains tax and Zambian income tax. The double taxation agreement between Botswana and the United Kingdom was approved by the African State legislator in January 2006. The agreement was signed in Gaborone on 9 September 2005 and entered into force on 4 September 2006. Capital gains for the purpose of determining the applicable marginal tax rates. However, business and investment losses cannot be offset by labour income. Rental income from commercial real estate is subject to a withholding tax of 10%. This is a provisional tax that is credited at the time of assessment. A tax credit is granted unilaterally if the amounts received by a resident of Botswana have been taxed abroad and a double taxation agreement (DTA) has been concluded. A tax credit is also granted if income from a source in Botswana has been the subject of a WHT. The amount of the exemption is limited to the lower amount of tax paid by deduction, which is normally paid in Botswana on that income. Dividends are subject to a withholding tax of 5% if the company receiving these dividends holds at least 25% of the participation of the company paying the dividend and a withholding tax of 12% on the gross amounts if the participation is less than 25%.

Income tax payable by the individual employee on his or her annual gross income is generally recovered at source under the PAYE payroll deduction system and source deductions on certain categories of income. All natural persons whose annual gross income exceeds BWP 36,000 must register by 30 September at the latest. Register as a taxpayer after the end of the tax year and file annual tax returns. An extension is possible on request. The same principle applies to profits from the sale of shares in a company whose assets consist primarily of real estate located in one of the countries. Interest, business royalties, and management or consulting fees paid by a resident to a non-resident are subject to a withholding tax of 15% on the gross amount paid. Both countries generally use the imputation method to eliminate double taxation. It also contains a provision for a tax saving credit for taxes levied in accordance with legislation, regulations for the promotion of economic development in Botswana or Botswana. Zambia shall be introduced, exempted or reduced, provided that the competent authorities of the States Parties have mutually agreed that such arrangements are appropriate for the purposes of the provision.

Non-resident natural persons are required to register as taxpayers and comply with all tax reporting and compliance obligations relating to income from a Botswanan source in the same way as residents. However, non-residents are taxed slightly differently from residents as there is no tax exemption for the first BWP36,000 per year, which is taxed at a rate of 5%. Relief is provided for both in national law and in double taxation treaties. This exemption corresponds to the foreign tax paid, subject to a maximum amount of Botswana tax on the income in question. The Treaty contains the provision that a permanent establishment is considered to be constituted if an enterprise of a Contracting State provides services by employees or other persons recruited for the same or related project or projects for a period or periods of more than 6 months in total within a period of 12 months. Are there any income zones that are exempt from tax in Botswana? If so, please provide a general definition of these areas. If a non-resident of Botswana is appointed as a statutory director (i.e. Board members of a Botswana-based group company trigger a personal tax liability in Botswana, even if no separate commission/remuneration is paid for their duties as a board member? The new treaty will enter into force once it has been ratified by the parliaments of Botswana and South Africa and when both countries have notified each other of the completion of the formalities.

Do botswana`s tax authorities adopt the economic employers` approach when interpreting Article 15 of the Treaty on Economic Co-operation and Development (OECD)? If not, do the Botswana tax authorities plan to adopt this economic employer interpretation in the future? Last week, it was announced that Botswana and South Africa had signed a new double taxation agreement, which aims to replace the agreement signed between the two countries in 1978. By aligning our thinking with your talent management goals, we can help you plan and manage your global workforce. .