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HMRC internal manual

Double Taxation Relief Manual

From
HM Revenue & Customs
Updated
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Botswana: Underlying Tax

(1) DOCUMENTS NEEDED TO SUPPORT THE UNDERLYING TAX CLAIM

The accounts and the notice of assessment to income tax. Profits are assessed on a current year basis.

(2) RESERVES

Relevant profits are increased by realisations of revaluation/capital reserves which are transferred to retained earnings. Financial institutions are no longer required to maintain a statutory reserve.

(3) WITHHOLDING TAX ON DIVIDENDS

The withholding tax (WHT) rate is 12% (15% up to 1 July 2007). However, in many cases a reduced amount or nil WHT is payable as additional company tax (ACT) brought forward is set against the withholding tax liability. The notice of assessment details the ACT brought forward and how the WHT payable is calculated. The WHT payable often relates two or more dividends which are paid out of different years profits. For example, the assessment for the tax year ended 30 June 2002 will detail dividends declared over that year which could be final and interim dividends paid out of a company’s profits for the periods ended 31 December 2000 and 2001 respectively.

(4) SPARED TAX

Credit is available for spared tax (see DT3854). Attach a certificate or other documentary evidence showing the spared taxes.