Expenses reduce a company's profit, and so corporate income tax. According to local auditors' practice, deductible expenses include employees' medical insurance and their leave. An owner who appoints themselves director is also an employee of the company: the owner's leave and the leave of the owner's family can be treated as company expenses. The company's auditor sets the conditions and supporting documents.
In short
- Deductible expenses include medical insurance for employees and staff leave.
- An owner-director is also an employee: the owner's leave and the family's leave can be treated as company expenses.
- The company's auditor sets the conditions and supporting documents.
- Each N$100,000 of deductible expenses lowers corporate income tax by N$30,000 at a rate of 30%.
What a company treats as expenses
| Expense | The auditor's practice | Who sets the conditions |
|---|---|---|
| Medical insurance for employees | counts as a deductible expense | the company's auditor |
| Staff leave and holidays | counts as a deductible expense | the company's auditor |
| Leave of the owner-director and family | an owner who appoints themselves director is also an employee; the leave can be treated as a company expense | the company's auditor sets the conditions and supporting documents |
| Director's salary | deducted from profit as an expense | the company's auditor |
| Depreciation of assets | write-off over 5 years at 20% a year | the company's auditor |
Medical insurance for employees
An employee's medical insurance is among the company's deductible expenses. For the company it is a way to offer staff additional cover while reducing taxable profit. The auditor sets the conditions; the auditor also advises which documents to keep.
Staff leave
Staff leave is another item that auditors treat as a deductible expense. For a small company where the owner works with a few employees it is a noticeable budget line, so it is better to agree the accounting with the auditor before the trip rather than after.
The director is also an employee
An owner who has appointed themselves director is an employee of their own company. So, according to auditors' practice, the owner's leave and the leave of the owner's family can be treated as company expenses. This practice is described by an auditor working in Namibia; the company's auditor sets the conditions and supporting documents, so the specific scheme is worth discussing with them in advance.
If the owner receives a salary as director, it is deducted from profit as an expense, and tax on it is calculated on the personal income tax scale: salary or dividends.
How expenses reduce corporate income tax
Corporate income tax is 30% (a cut to 28% is planned from 1 April 2027). Expenses recognised as deductible reduce the base on which the tax is calculated. A simplified illustration:
| Item | Value, N$ |
|---|---|
| Expenses recognised as deductible | 100,000 |
| Corporate income tax rate | 30% |
| Corporate income tax becomes lower by | 30,000 |
This is a simplified illustration: the final effect depends on all of the company's data. More on the tax: corporate income tax in Namibia.
The effect at different amounts
A simplified illustration: how the tax changes at different amounts of deductible expenses.
| Deductible expenses, N$ | Tax lower at 30%, N$ | Tax lower at 28% (planned from 1 April 2027), N$ |
|---|---|---|
| 50,000 | 15,000 | 14,000 |
| 100,000 | 30,000 | 28,000 |
| 250,000 | 75,000 | 70,000 |
Expenses and depreciation
Alongside staff-related expenses, accelerated depreciation is used: company assets are written off over 5 years at 20% a year. More: accelerated depreciation in Namibia.
What to discuss with the auditor
- which staff expenses the company can account for;
- how to account for the leave of the owner-director and family;
- which supporting documents to keep;
- how expenses combine with the director's salary and depreciation.
Who handles accounting in a company is explained in an auditor instead of an accountant; for the general overview of taxes, see Namibia taxes in 2026.
This material is provided for reference. Data as of October 2026.
FAQ
Which expenses does a company in Namibia treat as deductible?
According to the auditor's practice, deductible expenses include employees' medical insurance and staff leave.
Can the owner's leave be treated as an expense?
An owner who appoints themselves director is also an employee: the owner's leave and the family's leave can be treated as company expenses. The company's auditor sets the conditions and supporting documents.
How do expenses affect tax?
Deductible expenses reduce the profit on which corporate income tax (30%) is calculated. Each N$100,000 of expenses lowers the tax by N$30,000.
Who decides which documents are needed?
The company's auditor: the auditor sets the conditions and supporting documents.
