Harmful Tax Practices – 2023 Peer Review Reports on the Exchange of Information on Tax Rulings

831. Namibia can legally issue the following four types of rulings within the scope of the transparency framework: (i) cross-border unilateral APAs and any other cross-border unilateral tax rulings (such as an advance tax ruling) covering transfer pricing or the application of transfer pricing principles; (ii) rulings providing for unilateral downward adjustments; (iii) permanent establishment rulings; and (iv) related party conduit rulings.

832. For Namibia, past rulings are any tax rulings issued prior to 1 March 2020. However, there is no obligation for Namibia to conduct spontaneous exchange information on past rulings.

833. For Namibia, future rulings are any tax rulings within scope that are issued on or after 1 March 2020.

834. In the prior years’ peer review reports, it was determined that Namibia did not yet have processes in place to ensure the implementation of the obligations relating to the transparency framework. During year 2021, Namibia started to develop a process, but it is not known whether such a process was implemented in the year in review, and therefore the recommendation remains in place.

835. In the prior years’ peer review reports, it was determined that Namibia did not yet have a review and supervision mechanism under the transparency framework. During the year in review, it is not known whether Namibia implemented such a review and supervision mechanism, and therefore the recommendation remains in place.

836. Namibia is recommended to ensure that it has put in place an effective information gathering process to identify all relevant future rulings and all potential exchange jurisdictions and to implement a review and supervision mechanism, as soon as possible (ToR I.A).

837. In the prior years’ peer review reports, it was noted that although Namibia does not have an explicit domestic legal basis to exchange information spontaneously, international agreements can override secrecy provisions prohibiting the exchange of information. Therefore, Namibia will be able to exchange information on rulings with jurisdictions that are treaty partners. Furthermore, there are no legal or practical impediments that prevent the spontaneous exchange of information on rulings as contemplated in the Action 5 minimum standard.

838. Namibia has international agreements permitting spontaneous exchange of information, including (i) the Multilateral Convention on Mutual Administrative Assistance in Tax Matters: Amended by the 2010 Protocol (OECD/Council of Europe, 2011[2]) (“the Convention”) and (ii) bilateral agreements in force with 11 jurisdictions.1

839. In the prior years’ peer review report, it was determined that Namibia did not yet have a process to complete the templates on all relevant rulings, to make them available to the Competent Authority for exchange of information, and to exchange them with relevant jurisdictions. The Exchange of Information Unit within the Namibia Revenue Agency was set up in 2021 and Namibia started to develop a process for the spontaneous exchange of information on rulings. In the prior year’s peer review report it was noted that Namibia was still in the process of implementing a process for exchange of information.

840. As it is not known whether action has been undertaken on this aspect during the year in review, the recommendation remains in place.

841. Namibia is recommended to develop a process to complete the templates for all relevant rulings and to ensure that the exchanges of information on rulings occur in accordance with the form and timelines under the transparency framework going forward (ToR II.B).

842. As there was no information on rulings exchanged by Namibia for the year in review, no statistics can be reported.

843. Namibia does not offer an intellectual property regime for which transparency requirements under the Action 5 Report (OECD, 2015[3]) were imposed.

[1] OECD (2021), BEPS Action 5 on Harmful Tax Practices - Terms of Reference and Methodology for the Conduct of the Peer Reviews of the Action 5 Transparency Framework, OECD Publishing, Paris, http://www.oecd.org/tax/beps/beps-action-5-harmful-tax-practices-peer-review-transparency-framework.pdf.

[3] OECD (2015), Countering Harmful Tax Practices More Effectively, Taking into Account Transparency and Substance, Action 5 - 2015 Final Report, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, Paris, https://doi.org/10.1787/9789264241190-en.

[2] OECD/Council of Europe (2011), The Multilateral Convention on Mutual Administrative Assistance in Tax Matters: Amended by the 2010 Protocol, OECD Publishing, Paris, https://doi.org/10.1787/9789264115606-en.