The Accountant

💰 "Thinking of Drawing Dividends or Member Distributions? Here’s What You Should Know (2025 Update)"
We’re getting more and more questions lately about how to take money out of your business — especially from Close Corporations (CCs) and (Pty) Ltd companies.

Here’s the key distinction:

➡️ (Pty) Ltd Companies pay dividends to shareholders
➡️ CCs distribute profits to members via member accounts (not called ‘dividends’ but often treated similarly for tax purposes)

With the Income Tax Amendment Act (2024) introducing a 10% withholding tax on dividends from 1 Jan 2026, many owners are asking:

“Should we declare dividends now? Or distribute profits another way?”

✅ You can still distribute retained income to a loan or member account — but this must be properly documented and based on available profits.
❌ What you can’t do is disguise salary-type payments or personal expenses as distributions — that’s a quick way to attract audit attention.

📌 Tip: If you're a CC, and your business made profits over the last few years, it might be wise to formalise distributions before the new dividend tax regime tightens up — but only with proper resolutions and accounting support.

📅 Smart businesses plan ahead — declare dividends or distributions before the 10% kicks in Jan 2026.

👀 Want to understand your options before year-end?
We’re happy to help you evaluate what’s allowed and how to document it cleanly — especially if your financial year ends June 2025.

Tax changed. Has your strategy? Let Hamilton Chartered Accountants make sure you’re covered.

Need help getting your VAT right? Let’s talk before NamRA does.

🔍 VAT Zero-Rating for Going Concern Sales in Namibia

Selling a business as a going concern can be VAT zero-rated if specific conditions are met. This includes selling the entire business or a substantial part that allows the buyer to continue operations without major changes.

💡 Key Requirements:
• Both buyer and seller must be VAT-registered.
• The business must be actively trading at the time of sale.
• The sale agreement must state it’s a going concern and zero-rated.
• Transfer must occur within 21 days of signing the agreement.

🏢 Selling Buildings as Part of a Business:
• Buildings can be zero-rated if they are integral to the business being sold.
• If the building is sold separately or without an active business, VAT will apply.
• Clearly define the transaction as a going concern in the sale agreement.

🚩 Common Pitfalls:
• Missing the 21-day transfer deadline.
• Selling only assets, not the full business, without stating it’s a going concern.
• Failing to maintain the same business activity post-sale.

At Hamilton Chartered Accountants, we guide clients through VAT-compliant sales. Get in touch to ensure your next transaction qualifies for zero-rating.