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TAXATION
[ Direct Taxes] [ Indirect Taxes] [ Income Tax] [ Corporation Tax] [ Tax of
Dividends] [ Property Tax]
[ Capital Gains Tax] [ Social Security] [ Withholding Tax] [ Tax Holidays] [ Foreign
Tax Relief]
[ Stamp Duty] [ Customs & Excise Duties] [ Value Added Tax (VAT)] [ Index of Tax
Legislation] [ Making Contact]
Direct TaxesIncome Tax- A tax levied on the chargeable income of individuals, accruing in
Guyana or elsewhere, at a rate of 20% up to $350,000 and 33.333% thereafter.
Corporation Tax- A tax levied against the profits of any body corporate or
incorporate, excluding a partnership, at a rate of 35% for non-commercial
companies and 45% for commercial companies.
Property Tax- A tax levied on the value of property (movable and immovable). The
tax is levied on property valued in excess of $1,500,000 at a rate of up to .75%
for companies and in excess of $7,500,000 at a rate of up to .75% for
individuals.
Capital Gains Tax- A tax levied at a rate of 20% on the net chargeable gains
derived from the disposal of capital assets.
Social Security Tax and National Insurance- A tax in the form of contributions
to the Social security and National Insurance Scheme borne by the employee and
employer in the proportions of 4.8% and 7.2% respectively.
Withholding Tax- A tax levied at rates between 10%-20% on payments to
non-residents (and residents in some cases).
Indirect TaxesCustoms Duty- A tax at varying rates on imported goods. Rates vary between 5%
and 15% depending on the classification of the goods.
Stamp Duty- A tax levied at varying rates on various instruments, including
Deeds of Conveyance, receipts, Bills of Exchange, Mortgages, Powers of Attorney
and Policies of Insurance.
Income TaxThe Income Tax Act defines income as the gains or profits from any office or
employment, including compensation for the termination of any contract of
employment, the estimated value of any quarters, board or residence or any other
allowance granted in respect of employment whether in money or otherwise, other
than an allowance for medical or dental expenses, or for any passage to or from
Guyana.
Employment is the position of an individual in the service of some other person,
including the Government and employment income includes salaries, wages,
overtime pay, leave pay, sick bonus, stipends, commissions, compensation for
termination of service and the estimated value of any quarters, board or
residence.
Administration
The tax year is the calendar year. Tax returns are required to be completed
annually, signed and submitted to the Inland Revenue Department not later than
April 30, following the year of income.
Tax is levied on the chargeable income of any person accruing in or derived from
Guyana or elsewhere, and whether received in Guyana or not. Chargeable income is
such income in excess of the tax-free personal allowance, i.e. $18,000 per
month/ $216,000 per annum.
Tax is payable on the following categories of income:
Business income
Employment income
Certain classes of dividends, interest or discounts
Charges for annuities other than an annuity paid out of a superannuation fund
Property income
Payment of tax
Employed persons are taxed on a pay-as-you-earn (PAYE) basis. It is the
obligation of the employer to remit the taxes payable. This is usually done by
payroll deduction.
Self-employed persons, i.e., by way of any trade, business, profession or
vocation, are required to pay advance taxes based on the chargeable income of
the preceding year, in quarterly installments, i.e at April 1, July 1, October 1
and December 31. Any balance of taxes due after the returns have been filed
should be paid on or before April 30 of the following year.
Where a person is employed or carries on a business for only one part of the
year he is required to prepare and submit a tax return for all the income earned
during the period and that income shall constitute his income for the year.
Non-residents: A non-resident for tax purposes is one who resides in Guyana for
183 days or less in a twelve month period. There is no distinction between
resident and non-resident workers with respect to the taxation of income arising
in Guyana.
Non-residents are required to prepare an income tax return for all income earned
during their stay in Guyana. That income constitutes the individual’s earnings
for the year. All taxes due after the return has been filed must be paid over to
the Commissioner of Inland Revenue on or before April 30 of the following year.
Penalties:
Late submissions attract a penalty of two percent (2%) of the tax assessed or
five percent (5%) if the return is not submitted within the time specified in a
Demand Notice.
Rates of tax
The tax-free personal allowance is G$216,000 per annum or G$18,000 per month.
Tax is computed on a progressive basis.
On income between G$216,000 and G$350,000 a rate of 20% is charged. On Income in
excess of G$350,000 a rate of 33.3333 % is charged.
Non-taxable allowances
The following allowances paid to employees are non-taxable:
Traveling allowance
Company car in the place of a traveling allowance
Station allowance, subsistence, entertainment and meals
Security and telephone
Allowance for medical or dental expenses or for any passage to and from Guyana.
There is no prescribed limit for tax-free allowances. However, the Commissioner
of Inland Revenue may deem certain amounts excessive and find such excess
taxable. These allowances should therefore be reasonable in the circumstances of
each individual.
Income exempt from tax:
Income exempt from tax includes:
Emoluments payable to members of permanent consular services of foreign
countries for services rendered in their official capacity.
Emoluments payable to personnel of a Government other than the Government of
Guyana who are in Guyana in connection with a technical co-operation or
assistance programme or project where the agreement establishing such programme
or project provides.
Emoluments payable to personnel of the Government of the United States of
America in connection with a programme or project to be carried out under the
Agreement for Technical Co-operation 1951.
Income arising from any scholarship, exhibition, bursary or any similar
educational endowment held by a person receiving full time instruction at a
University, College, school or other educational establishment.
Any emoluments payable under an incentive scheme approved by the Minister.
Social security Benefits.
Corporation Tax
Under the Corporation Tax Act, corporation tax is payable upon the profits of
any body corporate or incorporate, excluding a partnership, accruing in or
derived from Guyana, whether received in Guyana or not.
Income from the following sources is taxable:
any trade or business;
any profession or vocation or management charges or charges for the provision of
personal services and technical and managerial skills;
Capital gains accruing on the disposal of property within twelve months of its
acquisition;
interests, discounts, annuities or other accrued or periodic payment received
for the use of capital;
Premiums, commissions and fees.
Rentals and royalties paid for the use or the right to use: (1) copyrights,
artistic or scientific work, patents, designs, plans, secret processes or
formulae, trade marks, motion picture films, films or tapes for radio and
television broadcasting or other like properties or rights, or (ii) information
concerning industrial, commercial or scientific knowledge, experience or skill;
and
Dividends and other income from non-resident companies and other persons and
entities including partnerships.
Resident and non-resident companies:
Resident companies are liable to tax on their world-wide income. A company is
deemed resident in Guyana if its control and management are exercised in Guyana.
Non-resident companies which carry on a trade or business in Guyana are subject
to tax on that income which is derived form Guyana whether or not it is received
in Guyana.
Rate of tax
The rate of corporation tax for commercial companies is forty-five percent (45%)
and for non- commercial companies is thirty-five percent (35%).
A commercial company is one that derives at least seventy- five percent (75%) of
its gross income from goods not manufactured by it or if it is engaged in
telecommunication, banking or insurance other than long-term insurance.
Companies are subject to tax on the income reported in their financial
statements prepared in accordance with generally accepted accounting principles
and subject to certain adjustments.
Special tax rates:
There are no special tax rates applying to particular industries.
Minimum Corporation Tax:
A Minimum Corporation Tax (MCT) of two percent (2%) of turnover is payable by
commercial companies.
Loss Relief:
Companies may carry forward loss for an unlimited number of years, but such
losses may not reduce the taxable income in any year by more than fifty percent
(50%) or in the case of commercial companies the tax payable to less than two
percent (2%) of turnover. Loss carry-backs are not permitted.
Deductibles:
The Act allows for tax purposes the deductibility of all expenses of a revenue
nature wholly and exclusively incurred in the production of income. The
principles of deductibility are generally similar to those which apply in North
America and the United Kingdom. Deductions for administrative, technical,
professional or other managerial service fees paid to a non-resident company or
branch referred to in the Act as "head office expenses" may not exceed one
percent (1%) of annual turnover. Charitable donations are not deductible unless
these are made under a Deed of Covenant.
Foreign Tax Relief:
Foreign Tax Relief is available under Double Tax Treaties with Canada, the
United Kingdom and the Members of the Caribbean Community. Guyana may grant
unilateral relief for foreign taxes paid in countries with tax systems and
legislation similar to those in Guyana.
Payment of Corporation tax
Corporation Tax is payable in advance quarterly instalments on the preceding
year's tax liability. Advance tax payments are due on March 15, June 15,
September 15 and December 15 of the calendar year prior to the tax year.
However, the Commissioner of Inland Revenue may require the company to calculate
the payments based on estimated income for the current year.
Tax returns must be filed and any balance of tax due, paid by April 30 of the
tax year. Failure to comply incurs a further charge of forty-five percent (45%)
on chargeable income for the first year and fifty percent (50%) thereafter.
Taxation of Dividends
Individuals:
Dividends paid by companies resident in Guyana to individuals resident in Guyana
are non-taxable.
Income Tax is payable in respect of dividends paid to individuals by companies
not resident in Guyana.
Withholding tax at a rate of fifteen percent (15%) is payable on gross
distributions made to any person not resident in Guyana.
Companies:
Corporation tax is payable in respect of dividends received by resident
companies from non-resident companies. However, dividends paid by resident
companies to other resident companies are exempt from tax.
A final withholding tax of fifteen percent (15%) is imposed on dividends paid to
non-resident companies.
General:
Resident companies and individuals must include dividends received from
non-resident companies in calculating their taxable income.
Property Tax
Individuals and companies with property in Guyana are liable to tax on the value
of such property. Property includes movable and immovable property, cash,
receivables and other rights. Liabilities are deducted from the amount of
property and the tax is payable on April 30 at the specified rate.
Rates of Property Tax:
Companies
| On the first $1,500,000 of Net Property |
Nil |
| On every dollar of the next $5,000,000 |
1/2% |
| On every dollar of the remainder |
3/4% |
Other Persons
| On the first $7,500,000 of Net Property |
Nil |
| On every dollar of the next $5,000,000 |
1/2% |
| On every dollar of the remainder |
3/4% |
The filing and payment deadline for property taxes is April 30 of the following
tax year. Non-compliance results in penalties similar to those applicable to
Corporation Tax and Income Tax.
Capital Gains Tax
Capital gains tax is imposed on the net chargeable gains derived from the
disposal of capital assets. Gains derived within twelve (12) months of the
acquisition date are treated as ordinary income and subject to corporate/income
tax at the applicable rates. Gains on assets disposed of between one and
twenty-five years are chargeable at the rate of 20%.
Capital Gains Tax is not chargeable on the transfer of shares or stock held in a
public company limited by shares. In the case of a company which was a private
company immediately before March 7, 1994 and was subsequently converted into a
public company limited by shares, the exemption applies only to capital gains
arising from the change of ownership of shares or stock after the expiry of two
years from the date on which the company was converted.
Social Security Tax and National Insurance
The National Insurance and Social Security Act provides for the compulsory
participation in the National Insurance Scheme. There is no provision which
enables employees or employers to exempt themselves from participation.
Contributions at the following rates are compulsory and must be deducted by the
employer and paid over by the fifteenth (15th) day of the following month:
Employee 4.8% of insurable earnings
Employer 7.2% of insurable earnings
The insurable earnings ceiling is $60,000 per month. This limits employee and
employer contributions to a maximum of $2,880 and $4,320 respectively.
Withholding Tax
Withholding tax is chargeable on the following classes of income:
any gross distribution made to any person not resident in Guyana
any gross payment other than interest identified below, made to any person not
resident not resident in Guyana or to any person on behalf of such non-resident
person, where such person is not engaged in trade or business in Guyana, so,
however, that in the case of payment of income arising outside Guyana to such a
person withholding tax shall not be payable;
gross payments, being interest earned on saving accounts held at commercial
banks and other financial institutions by any person whether resident in Guyana
or not;
gross payments, being interest earned on loans secured by bonds and similar
instruments by any person resident in Guyana or not;
every discount earned on treasury bills by the person who discounts the bill
whether on or before maturity.
Non-residents:
The following payments to non- residents are subject to withholding tax:
interest on any debt, mortgage or other security;
rentals;
royalties;
management charges or charges for the provision of personal services and
technical managerial skills;
premium (other than premiums paid to insurance companies and contributions to
pension funds and schemes)
commissions, fees and licences;
discounts, annuities or other annual or periodic payments;
dividends;
such other payments as may from time to time be prescribed.
A ‘payment’ is one without any deductions.
Rates of withholding Tax
| Interest |
15% |
| Distributions |
15% |
| Other payments |
10% |
Withholding tax rates under Double Taxation Treaties:
| |
Dividends |
Interest |
Royalties |
| Canada |
15% |
15% |
10% |
| United Kingdom |
15% |
15% |
15% |
| CARICOM |
0% |
15% |
15% |
Payment of withholding tax
Withholding tax is chargeable on payments without any deductions whatsoever.
Withholding tax must be paid within thirty (30) days of payment of amounts
subject thereto.
Withholding tax on branch profits
The profit of branches of companies remitted or deemed to be remitted is a
distribution for withholding tax purposes.
Where an office, branch or agency of any non-resident company engaged in trade
or business in Guyana remits or is deemed to remit any part of the profits of
such non-resident company accruing in or derived from Guyana, such office,
branch or agency is liable to withholding tax.
An office or agency of a non- resident company is deemed to have remitted its
profits in every event, except to the extent that it has reinvested to the
satisfaction of the Commissioner of Inland revenue, such profits or any part
thereof in Guyana. In determining the reinvestment of such profits the
replacement of fixed assets or investments in securities held for a period of
less than thirteen months are not considered.
“Profit” means profit after payment of any corporation tax.
Non- resident companies
A non- resident company for the purposes of withholding tax is a company ‘the
control and management of whose business are exercised outside Guyana’. An
overseas company with a branch in Guyana is not resident in Guyana by virtue of
the establishment of such branch, but may be assessed through the branch.
Tax Holidays
Tax holidays are granted in respect of pioneering activities, that is, to
companies whose trade or business are wholly of a developmental and risk-
bearing nature and likely to be instrumental to the development of the resources
of and beneficial to Guyana.
This does not include trade or business carried on by a gold or diamond mining
company or a company carrying on petroleum operations.
Tax holidays are granted for a period of up to ten (10) years and apply to the
part of a trade or business carried on by a company that is pioneering in
nature.
Foreign Tax Relief
Guyana may grant unilateral tax relief for foreign taxes paid in countries with
tax systems and legislation similar to those in Guyana. For members of the
British Commonwealth, the relief is 50% of the relief that would be available if
the foreign country were a treaty country. For other countries the relief if 25%
of such available relief. The available relief is the lower of the tax rate in
Guyana and the tax rate in the other country.
Double taxation
Foreign tax relief is available under Double Taxation Agreements which provide
generally for the avoidance of double taxation, the prevention of fiscal evasion
with respect to taxes on income and for the encouragement of international trade
and investment.
Guyana has concluded double taxation treaties with Canada, the United Kingdom of
Great Britain and Northern Ireland and CARICOM.
The Double Taxation relief (Taxes on Income) (Canada) Order 1987
The Double Taxation Relief (Taxes on Income) (United Kingdom of Great Britain
and Northern Ireland) Order 1992; and
The Double Taxation Relief (Taxes on Income) (Member States of the Caribbean
Community) Order 1995
The United States of America
Guyana is party to an agreement with the Government of the United States of
America for the exchange of information with respect to taxes- The Income Tax
(Exchange of Information) (United States of America) Order 1992.
This Agreement covers Federal income taxes, Federal taxes on self-employment
Income, Federal taxes on transfers to avoid income tax, Federal estate and gift
taxes and Federal excise taxes in respect of the United States of America and
Income, Corporation, Property and Capital Gains Tax in respect of Guyana.
Stamp Duty
Stamp duty is levied on several instruments including affidavits, statutory
declarations, Deeds of Conveyance, Mortgages, Share transfers, Awards of
Arbitrator, Powers of Attorney, Agreements, Bills of Exchange, Receipts and
Policies of Insurance.
Some of the more common instruments and the stamp duty payable are:
1. Sale or purchase of stock or marketable security where face value exceeds
$100- 2% of face value of transaction
2. Conveyance or transfer on the sale of a bond, debenture, scrip or share-
One-half of one percent (0.5%) of the consideration for the sale.
3. Affidavits and statutory declarations- $10
4. Award of Arbitrator where value of matter in dispute exceeds $100- 2% of face
value of the transaction
5. Appointment of a new trustee, appointment in execution of a power of any
property or interest in any property by an instrument other than a will- $15
6. Deeds and Notarial Acts in lieu thereof- Between $25-$150
7. One year multiple entry visa to Guyana- $100; One year transit visa- $50
8. Renewal of Passport- $500
9. Sale of property- Land in Guyana is held either by Transport or a Certificate
of Title. The stamp duty on sale of land differs in each case.
· The rate of duty on land held by Transport- 2% of value of the land.
· The rate of duty on land held under a Certificate of Title- 2.5% of value of
land.
Customs Duty
Customs duty is paid on all goods imported into Guyana. The rates of duty vary
between 5%-150% depending on the classification of the item in question. Rates
of duty are highest on ‘Luxury items’ which include perfumes.
The classification of goods is governed by the provisions of the Customs Act.
Value Added Tax (VAT)
Value Added Tax (VAT) - a tax that is added to the original price of most goods
and services supplied in Guyana for domestic consumption. VAT is chargeable at a
standard rate of sixteen percent (16%) on the taxable supply of goods and
services within Guyana by a registered person.
Value Added Tax (VAT) is a tax on the domestic Consumption of imported and
locally produced goods and/or services (not exports); paid as a percentage of
their value at the time they are sold, paid for or delivered.
VAT was introduced in Guyana on January 1, 2007 and replaced the following six
(6) taxes:
Consumption Tax
Purchase Tax
Hotel Accommodation Tax
Telephone Tax
Service Tax
Entertainment Tax
The tax is charged incrementally (as value is added to the product or service)
at every stage of the production and distribution chain. It is collected by
VAT–registered businesses from their customers when they sell goods and/or
services that have been defined by law as a taxable supply.
The following transactions are deemed taxable supplies where:
(a) the stock in trade is being disposed of in the course of a business being
transferred as a going concern
(b) goods of a business are seized and sold to satisfy a debt
(c) goods of a business are taken for private use purposes (e.g. by the owners
or employees)
(d) a person ceases to be registered but continues to carry on business
(e) an indemnity payment is made under a contract of insurance in respect of a
loss incurred in the course of business.
Registered businesses must account for the tax they collect and they must make
regular payments to the Guyana Revenue Authority (GRA).
However, it should be noted that VAT is a tax on consumer spending – not a tax
on business.
Compared to almost all the current general consumption taxes to be replaced,
registered businesses actually gain under a VAT system because they are allowed
to deduct any VAT they incur on their business expenses, subject to certain
conditions, thereby reducing their overhead costs. This also benefits the
consumer since, in this way; a ‘tax cascade’ effect is avoided.
Place of Supply
Only supplies made in Guyana are liable to VAT. Generally, a supply is
considered to take place within Guyana if the supplier is resident in Guyana.
But in the case of a supply made by a person not residing in Guyana, the supply
will be regarded as taking place within Guyana based on the following:
(1) the goods are in Guyana at the time of supply; or
(2) the service is performed in Guyana by a person present or having a permanent
establishment in Guyana at the time the service is performed.
Rates of Tax
Taxable supplies are taxed at one of two rates depending on the nature of the
supply.
Standard Rate
There is a standard rate of sixteen percent (16%) which is the rate applied to
the vast majority of taxable supplies
Zero Rate
Some supplies are taxed at zero percent (0%) which is the rate applied to all
supplies listed in Schedule I of the Vat Act. The advantage of zero
rating is that although the supplies bear no tax the registered person can claim
a credit for VAT paid on his/her purchases and expenses.
Value of Supply
The VAT charged on a supply is calculated by multiplying the value or
consideration of the supply by the rate of the tax charged. Where the
consideration is not paid in money or paid partly in money, or where the
transaction is between associated persons (not dealing with each other at arms
length) the value of the supply is the transaction value. With respect to
imports, the value for VAT is the invoice value of the supply plus the cost of
insurance, freight and other duties payable on the importation. Where the total
of the above is less than the transaction value, then the value for VAT shall be
the transaction or fair market value.
Time of Supply
The time of supply identifies the tax period in which a transaction is to be
taxed. The tax period is the period of one calendar month for which a registered
person is to account for VAT to the VAT department. The general rule is that a
supply takes place on the earliest of the following:
(a) the date when the goods are delivered or made available or in the case of
services, when the services are completed
(b) the date the invoice is issued by the supplier and
(c) the date the payment is made for the taxable supply
Tax Legislation
1. Tax Act, Cap. 80:01
2. Consumption Tax Act, Cap. 80:02
3. Income Tax Act, Cap.81:01
4. Income Tax (In Aid of Industry) Act, Cap. 81:02
5. Corporation Tax Act, Cap. 81:03
6. Capital Gains Tax Act, Cap. 81:20
7. Property Tax Act, Cap. 81:21
8. Customs Act, Cap. 82:01
9. National Insurance and Social Security Act, Cap. 36:01
Making Contact
1. Inland Revenue Department- mailing add, tel, fax, e-mail
2. Customs & Excise Department
3. National Insurance Scheme
Disclaimer: The information contained in this website is not intended to
replace the advice of an attorney-at-law. For further information or legal
advice we invite you to contact our office.
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