TAX LAWS of GUYANA

Table of Contents
ECONOMIC OVERVIEW
TAX LAWS OF GUYANA
o INCOME TAX
Pay As You Earn (PAYE)
Allowances
National Insurance Contributions
o CORPORATION TAX
Scope: Resident and Non-Resident Taxation
Tax Rates
Payments of Tax
Treatment of losses
Tax Filing
o VALUE ADDED TAX (VAT)
Scope
Summary
o PROPERTY TAXES
Rates
Individuals
Companies
o WITHHOLDING TAX
Rates
Compliance, Penalties and Interest
o INSURANCE PREMIUM TAX
o DOUBLE TAXATION TREATIES
o CAPITAL GAINS TAX
CAVEAT

ECONOMIC OVERVIEW

Guyana is a sovereign state on the northern mainland of South America. It is bordered

by the Atlantic Ocean to the north, Brazil to the south and southwest, Suriname to the
east and Venezuela to the west. With 215,000 square kilometres (83,000 sq mi),
Guyana is the fourth-smallest country on mainland South America
after Uruguay, Suriname, and French Guiana.

Guyana is one of the few Caribbean countries that is not an island in the West Indies.
The Caribbean Community (CARICOM), of which Guyana is a member,
is headquartered in Guyanas capital and largest city, Georgetown. In 2008, the country
joined the Union of South American Nations (UNASUR) as a founding member.

TAX LAWS OF GUYANA

INCOME TAX

This is a tax levied on individuals earning chargeable income in Guyana in excess of

$720,000 or of chargeable income, whichever is higher. National Insurance
contributions paid by employed persons and mortgage interest relief are deductible. A
rate of 28% applies to the first $1,440,000 of taxable income while 40% applies to the
remainder.

Pay As You Earn (PAYE)

Employers are required to deduct and remit the taxes (PAYE) to the Guyana Revenue
Authority (GRA) by 14th day following the month in which deductions made.

Failure to remit PAYE by the stipulated dated will attract penalty at the rate of ten
percent in additional to the following:

two percent of the unpaid amount for each month or part thereof that the tax remains unpaid
during the first three months after the due date;

three percent per month or part thereof during the next three months;

four percent per month or part thereof during the next six months; and

five percent per month or part thereof thereafter.

Allowances

Taxable Allowances Non-Taxable Allowances

Duty Allowance Travelling Allowances (as opposed to transportation allowance)

Uniform Allowance Station Allowance

Acting Allowance Entertainment Allowance

Overtime Allowance Subsistence Allowance

Housing Allowance Security and Telephone Allowance

Gratuity Medical and Dental Expenses

Leave Entitlement (Vacation) Allowance for travel to and from Guyana

Laundry Gratuity

Leave Entitlement (Vacation)

Severance Pay

NOTE: All allowances are non-taxable for judges

Non-taxable allowances are taxable where it cannot be proven to the satisfaction of

the Commissioner-General that the allowances were used for the purposes intended.

Taxable in all non-government agencies

National Insurance Contributions

The National Insurance Scheme (NIS) extends Social Insurance Coverage on a

compulsory basis, to all persons between the ages of sixteen (16) and sixty (60) years
who are engaged in Insurable Employment.

Both the Employer and Employee pay Contributions into the Scheme at the following
rates:

Employee 5.6% of insurable earnings

Employer 8.4% of insurable earnings

The actual wage / salary is, at present, subjected to a ceiling of $220,000 per month or
$50,769 per week for National Insurance purposes.

Self-employed Persons contribute 12.5% of their declared Income as Contributions,

subject to minimum earnings of $68,750 per month.
The NIS deducted should be paid to the NIS by the 15th day of the month following the
month in which the deduction was made.

CORPORATION TAX

Scope: Resident and Non-Resident Taxation

Resident companies are subject to tax on all its profits whether or not arising in
Guyana.

Non-resident companies carrying on business in Guyana are subject to Corporation Tax

on profits directly or indirectly accruing in Guyana.

The ITA defines resident as a company the control and management of whose business
are exercised in Guyana.

Tax Rates

The rates of corporation tax are as follows:

45% of the chargeable profits of a telephone company;

40% of the chargeable profits of a commercial company other than a telephone

company; and

27% of the chargeable profits of any other company.

A Commercial Company is defined as a Company at least 75% of the gross income of

which is derived from trading in goods not manufactured by it and includes any
commission agency, any telecommunication company, any body corporate licensed or
otherwise authorised by law to carry on Banking business in Guyana and any Company
carrying on in Guyana Insurance business, other than long-term insurance business as
defined in Section 2 of the Insurance Act.

Where a company carries on both commercial and non-commercial activities, the profits
of the activities are taxed separately at the rate of 40% and 27% respectively.
A minimum tax of 2% of turnover applies to all commercial companies. Where it is
proven to the satisfaction of the Commissioner-General that this minimum tax is higher
than the amount payable using the 40% rate, the tax payable shall be limited to 40%
of chargeable profits. Non-commercial companies and companies carrying on insurance
business are exempt from the minimum tax of 2% of turnover.

Payments of Tax

Advance instalments are due on or before 15 March, 15 June, 15 September and 15

December of the calendar year and should be based on the preceding years tax
liability. Any balance of tax unpaid for the income year should be paid by the 30 April of
the tax year. Any balance unpaid will attract penalty and interest.

Treatment of losses

Losses can be carried forward indefinitely and can only be used to offset up to 50% of
chargeable profits in subsequent years by non-commercial companies and shall not
reduce taxes payable beyond the minimum tax of 2% of turnover by commercial
companies.

Tax Filing

Companies are required to file a corporation tax return on or before 30 April in the year
following the year of assessment.

VALUE ADDED TAX (VAT)

Scope
VAT is charged on the value of:

every taxable supply by a taxable person in Guyana; and

every import of goods or import of services, other than an exempt import.

Summary

Key points to note:

The standard rate is 14% .

Certain goods and services may also be zero-rated or exempt.

The registration threshold is fifteen million dollars ($15,000,000) at the end of twelve (12) or
fewer months, or where the taxable activity is expected to exceed the threshold in the next 12
months.

Monthly VAT Returns must be filed with the GRA within 15 working days after the
end of the period.

Late filing will result in a late filing penalty.

A registrant will be entitled to recover the VAT on expenses incurred to make taxable
supplies known as input tax subject to certain conditions.

Input tax incurred in making exempt supplies cannot be recovered.

If you make a mixture of taxable and exempt supplies you can reclaim the proportion of
input tax that relates to taxable supplies using the partial exemption method to calculate the
proportion of input tax which could be reclaimed.

VAT Reverse-charge: The Guyana Value Added tax Act makes provision for a VAT
reverse charge on payments made to persons outside of Guyana by an entity not
making taxable supplies or making taxable and exempt supplies.

PROPERTY TAXES
This is an annual tax charged on the net property which any person, including an
individual and a company, owns at the end of each year.

Property is defined as all property movable or immovable, rights of any kind, and
effects of any kind, situated or having their seat in Guyana or elsewhere and the
proceeds of sale thereof, and any money or investment for the time being representing
them.

Net Property is the amount by which the total value of the property owned by any
person at the end of the year, exceeds the total value of all debt owed by him at that
time. Property is stated at cost less any wear & tear allowances applicable. Property
acquired prior to 1 January 2011 shall be stated at their value at that date plus any
improvements and additions made after that date less any wear & tear allowances
applicable from that date.

Rates

The rates of tax are as follows:

Individuals

For Individuals as from the year of assessment 2014, year of income 2013
on the first $40,000,000 of Net Property

For every dollar of the remainder of Net Property

Companies
For Companies as from the year of assessment 2014
On the first $10,000,000 of Net Property N

For every dollar of the next $15,000,000 0

For every dollar of the remaining Net Property 0

Where the value of stocks or shares of a company which has paid or is liable to pay the
tax has been included in the net property of a shareholder, an amount equal to the
product of the value so included and the rate of the tax payable by the company shall
be set off against tax payable by the shareholder.

However it shall be noted that:-

the amount of set-off shall in no case be in excess of the amount of tax payable by
the shareholder before the set off.

the rate of tax shall be the rate arrived at by dividing the total value of net property of the
company (including investments which have been excluded from net property see (10 (a) iv
above) into the tax payable by the company.

WITHHOLDING TAX

Rates

WHT rates applicable to payments made to non residents are listed in the table below:
Payment Individ

Distributions 20%

Interest on any debt, mortgage or other security 20%

Rentals 20%

Royalties 20%

Management charges or charges for the provision of personal services and technical and 20%
managerial skills

Premiums (other than premiums paid to insurance companies and contributions to pension 20%
funds and schemes) commissions, fees and licenses

Discounts, annuities or other annual or periodic payments 20%

WHT at the rate of 20% also applies to payments of interest on savings accounts,
interest on loans secured by bonds and similar instruments, and discounts earned on
treasury bills (except for such income earned by commercial banks).

Notes:

No WHT is payable on interest paid by any person on a temporary bank loan or

in respect of any trade account.

No WHT is payable on any gross payment of income arising outside of Guyana.

The rate of 10% will apply on payments made to non-resident companies under a contract
and such amount shall be set against the Corporation taxes payable by the non-resident company.

No withholding tax is payable on dividends paid out of Capital Gains.

Lower rates may be applicable under double taxation treaties to which Guyana is
a party.

Withholding tax at the rate of 2% is payable on all gross payments in excess of

$500,000 to a contractor, defined as a person contracting with or employed directly by
an owner or an agent of the owner to supply services, goods, materials, equipment, or
personnel in the furtherance of the services is payable on dividends paid out of Capital
Gains. This withholding tax is creditable against the Income/Corporation taxes payable
by the contractor.

Compliance, Penalties and Interest

Withholding tax must be remitted to the tax authorities within 30 days of the
payment to the non-resident.
 A penalty of 10% of the amount or GYD$10, whichever is the greater, shall apply to any
outstanding withholding tax. Additionally, interest at 18% per annum applies.

Interest at a rate of 2% per month or part thereof calculated from the date on which the
payment was due until the date on which the payment was made.

Branch Profits Tax

After tax profits of a Branch of a non resident company is a deemed distribution for tax
purposes whether or not distributed. This profit less any amounts reinvested in Guyana
other than in the replacement of fixed assets or in securities held for a period of less
than thirteen months (subject to the Commissioners satisfaction), is subject to WHTat
the rate of 20% subject to any DTT.

INSURANCE PREMIUM TAX

Insurance premiums paid to a company in respect of insurance other than long-term

insurance, outside Guyana, attracts Premium Tax.

Where a foreign Insurance Company has not established a place of business in

Guyana, the tax is paid at a rate of 10%

While 6% is paid where the insurance company has established a place of

business in Guyana.

DOUBLE TAXATION TREATIES

Guyana is party to three double tax treaties:

(I) United Kingdom,

(II) Canada; and

(III) CARICOM.

CAPITAL GAINS TAX

This is a tax charged the net taxable gains made from the disposal of assets at the rate
of 20%.

No Capital Gains Tax is payable where the asset is held for less than one year (in such
cases, the gain is treated as profit or income under the Income Tax or Corporation Tax
Acts) or where the asset is held for more than twenty five years.

The amount of Capital Gains or Capital Loss arising from change of ownership of any
property shall be calculated after making the following deductions:-

(i) The expenditure (other than the purchase price, if any) incurred solely in connection with
the acquisition of that property by the person who is the owner of that property immediately
before the occurrence of such change of ownership;

(ii) The expenditure incurred, by the person owning the property, immediately before the
change of ownership, in making improvements, additions and alterations to that property;

(iii) The expenditure incurred by the aforesaid owner solely in connection with the transaction
which results in such change of ownership, for example, commissions, fees for professional
services of surveyor, accountant, etc.

Where the property was acquired prior to 1 January 2011, the value at that date and
the cost of subsequent expenditure shall be used.

A net Capital Loss incurred in any year is carried forward for future set-off. However,
net Capital Loss which is less than one thousand dollars is not carried forward.

Any person disposing of any property to the Government for public purposes shall not
be chargeable to Capital Gains Tax in respect to such disposal.

No Capital Gains Tax is charged, levied or collected in any year of assessment where
the net chargeable gain of any person does not exceed one thousand dollars.
 CAVEAT

The information on this page is provided as at 31 January 2017, and is provided for
information purposes only. It is not intended to be relied upon for specific tax and/or
business advice and as such, readers are encouraged to consult with professional advisors
on specific matters prior to making any decision.

Should you require tax advice, please contact us and we shall be happy to make a referral
to a local tax practitioner.