Tax on property income in Botswana

December 13, 2016

INDIVIDUAL TAXATION

Nonresidents are taxed on all income derived within Botswana. Married couples are assessed and taxed separately.

The tax year is 01 July of one year up to 30 June of the next year. The tax year 2017 is from 01 July 2016 up to 30 June 2017. The tax year 2018 is from 01 July 2017 up to 30 June 2018.

INCOME TAX

Income is taxed at progressive rates. A special set of tax bands apply to nonresident individuals.

INCOME TAX - NON-RESIDENTS

TAXABLE INCOME, BWP (US$) TAX RATE
Up to 60,000 (US$6,545) 5%
60,000 – 90,000 (US$9,818) 12.50% over US$6,545
90,000 – 120,000 (US$13,091) 18.75% over US$9,818
Over 120,000 (US$13,091) 25% on all income over US$13,091
Source: Global Property Guide

RENTAL INCOME
Rental income earned by nonresidents from properties in Botswana is subject to progressive tax rates. Any expenses that are unavoidably incurred in producing rental income are deductible. These expenses include interest on loans, improvements, irrecoverable rent, and others.

Rental income is subject to withholding tax at a rate of 5%. This tax is credited against the taxpayer’s final income tax liability.

CAPITAL GAINS
There is no separate capital gains tax in Botswana. Capital gains realized from selling real property is subject to income tax under a special regime. Capital gains are gross sales price less acquisition costs, improvement costs, and transaction costs.


CAPITAL GAINS TAX

TAX BASE , BWP (US$) TAX RATE
Up to 18,000 (US$1,636) 0%
18,000 – 72,000 (US$6,545) 5% on band over US$1,636
72,000 – 108,000 (US$9,818) 12.50% on band over US$6,545
108,000 - 144,000 (US$13,091) 18.75% on band over US$9,818
Over 144,000 (US$13,091) 25% on all value over US$13,091
Source: Global Property Guide

PROPERTY TAX

There are no property taxes in Botswana.

CORPORATE TAXATION

INCOME TAX

Income and capital gains earned by nonresident companies are subject to corporate income tax at a flat rate of 30%. Income-generating expenses are deductible when calculating taxable income.

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