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8.2.2. Withholding Taxes

The withholding tax on the following payments to non-residents is generally a final tax in satisfaction of the recipient’s tax liability. Tax treaties may provide for a lower relief or exemption from withholding tax.

Dividend

Tax is withheld at the rate of 10% (increased from 7.5% effective 1 July 2021) on dividends paid by Botswana resident entities to non-residents. There is generally no withholding tax on dividends paid out by an IFSC to a non-resident recipient.

Interest

Tax is withheld at the rate of 15% on interest paid by Botswana resident entities to non-residents.

Royalty Copyright

Tax is withheld at the rate of 15% on royalties paid to non-residents.

Royalty Patent

Tax is withheld at the rate of 15% on royalties paid to non-residents.

Royalty Trademark

Tax is withheld at the rate of 15% on royalties paid to non-residents.

Services Management

Tax is withheld at the rate of 15% on service management fees paid to non-residents.

Services Technical

Tax is withheld at the rate of 15% on service technical fees paid to non-residents.

Others

Any other income earned/received by non-residents like commission or brokerage, entertainment fees, etc., is taxed at the rate of 10%.

Tax is withheld at the rate of 3% on construction contract payments to non-residents if the transaction is in excess of BWP 2 million.

Further, tax is withheld at the rate of 5% on rent paid to non-residents, subject to certain conditions.

Below is a discussion of domestic withholding tax rules for most of the common cross border payments.

Capital Gains 22.0 %
Dividends 10.0 %
Interest 15.0 %
Royalty Copyright 15.0 %
Royalty Patent 15.0 %
Royalty Trademark 15.0 %
Sales 0.0 %
Service Management 15.0 %
Service Technical 15.0 %

* Rates are current as of 02 October 2022