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 following rates apply:
- Taxable gains between zero and P15,000: 0%
- Taxable gains between P15,001 and 60,000: 5%
- Taxable gains between P60,001 and 90,000: P2,250 plus 12.5% of the excess over P60,000
- Taxable gains between P90,001 and 120,000: P6,000 plus 18.75% of the excess over P90,000
- Taxable gains over P120,001: P11,625 plus 25% of the excess over 120,000
Shares, units or debentures of a public company or those actually traded on the Botswana Stock Exchange are exempt from disposal gains tax.
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 are eligible for tax exemption from the disposal gains tax. 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 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.
Further, disposal gains arising on the sale of shares in an IFSC company are also be exempted from tax.