Practice Area

Taxes

Direct Taxes

Income 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%-15% on payments to non-residents (and residents in some cases).

Indirect Taxes

Customs 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.

Consumption Tax– A tax levied on goods manufactured for local consumption, whether manufactured in Guyana or not. Rates of tax vary between 0%-30% depending on the classification of the goods.

Income Tax

The 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

Other Persons

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:

such other payments as may from time to time be prescribed.A ‘payment’ is one without any deductions.
Rates of withholding Tax

Withholding tax rates under Double Taxation Treaties:

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.

Consumption Tax

‘C Tax’ as it is referred to, is levied on any goods manufactured for local consumption, whether manufactured in Guyana or not.

Rates of tax vary between 0%-30% depending on the classification of the item in the

Schedules to the Consumption Tax Act. Some goods are or may be exempt from tax by Order of the Minister of Finance. Such exemptions are not permanent and may rescinded at any time by similar process. Tax is charged on the ‘transaction value’ of the item. This is the actual value plus freight.

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.