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Botswana: Domestic Corporate Taxation

Capital Gains Tax

The income accruing from the disposal of a principal private residence will be exempt from tax if the proceeds are re-invested in another residential property within 24 months of the disposal of the principal private residence. However, if the disposal gains are not so reinvested within a period of 24 months, the exemption would be available only in respect of the most recent disposal of the principal private residence.

The progressive rates of capital gains tax (CGT) are given in the table below:

 

Taxable Income
(pula)
Tax Rate
0 - 18,000 nil
18,001 - 72,000 5%
72,001 - 108,000 12.5%
108,001 - 144,000 18.75%
Over 144,000 25%

 

Shares, units or debentures of a public company or those actually traded on the Botswana Stock Exchange are exempt from CGT.

For companies that have released 49% or more of their equity shares for trading on the Botswana Stock Exchange, sale of any of their equity shares is eligible for tax exemption from CGT. This exemption excludes proceeds arising from sales of shares, units or debentures undertaken by investment or similar companies where the shares, units or debentures are disposed of for profit generation in the ordinary course of business.

Disposal of shares of international financial service centre (IFSC) companies are tax-exempt. Sale of shares of companies, whose underlying dominant assets are immovable properties that result in effectively transferring the property, will be deemed to be the sale of the immovable properties and subject to tax on disposal gains. Disposal gains on bonds and debentures issued by Government, Bank of Botswana, parastatals and special purpose vehicles formed for the securitisation of public debt are exempted from tax. Capital gains arising on the sale of shares in an IFSC company are also be exempted from tax.

 

 

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