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Ram & McRae Chartered Accountants 157 'C' Waterloo Street Georgetown Guyana, South America Tel: (592)-2-61072,60322,61301,76141 Fax:(592)-2-54221 Email: ramc@solutions2000.net |
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Income Tax - Self Employment/Business Income
Changes to Personal Tax Legistration 
Any employment income accruing in or derived from Guyana is subject to income tax regardless of where the payment is received. Individuals who are not ordinarily resident or not domiciled in Guyana and have earned income arising outside Guyana are subject to tax on that income only if it is received in Guyana. For the purpose of these rules, the term "ordinarily resident in Guyana" when applied to an individual means an individual who is resident in Guyana in the course of his or her customary way of life. An individual also may be deemed to be resident any one year in which he or she resides in Guyana for more than 183 days. Deemed residence must be distinguished from ordinary residence since it is unlikely that an individual who is deemed to be resident under the 183-day rule will be considered ordinarily resident for the purpose of taxing of his overseas income. Taxable Income
No expenses are deductible against employment income.
All individual taxpayers are entitled to a flat allowance of G$216,000 per year
Directors’ fees are subject to tax as income from employment. Interest from savings accounts and other accounts with banks and financial institutions is subject to a 15% final withholding tax. If a person’s total income from all sources is less than G$216,000, he or she receives a refund of the tax withheld by the bank. Losses incurred in one year from any trade, business, profession or vocation carried on by any person, either solely or in partnership, or from letting of property by any person either solely or in partnership, may be carried forward indefinitely and offset against what would otherwise have been taxable income in the year or years following, until losses have been completely recouped. The loss to be offset may not exceed the amount of the gain or profit arising from the same source in the same tax year. The loss that may be offset in any one year is limited to the amount that reduces the tax payable for the year to 50% of the tax that would otherwise be payable for the year No loss carrybacks are allowed. Capital gains tax is payable at the rate of 20% on the net capital gains arising from a change of ownership. Capital gains arising from the disposal of shares in public companies are exempt. The gain is calculated by deducting from the sale proceeds the cost of the asset. If the asset was acquired before January 1.1.91, then the market value at January 1, 1991 is substituted for cost. Gain on assets disposed of within 12 months of acquisition normally are taxed as income. Gains on assets of more than 25 years after acquisition are exempt from taxation. Property tax is payable by both individuals and companies on the net property held at December 31 of each year. Property includes tangible as well as intangible property, cash, receivables, and other rights. Liabilities are deducted from the amount of property, and property tax is payable at the following progressive rates:
Property tax returns must be filed and tax paid by April 30. Guyana does not impose estate, inheritance or gift taxes. The National Insurance and Social Security Act provides for the compulsory participation of both employers and employees in the National Insurance Scheme with no exceptions. Contributions at the following rates are compulsory and must be remitted by the 15th of the following month. Employees must contribute 4.8% and employers 7.2% of insurable earnings of up to G$10,615 weekly or G$46,000 monthly. The insurable earnings limit combined with the compulsory contribution rates result in maximum contributions by employees of G$510 and G$2,208 monthly. If insurable earnings are below the indicated limits, the contributions is calculated at the corresponding rate and rounded off to the nearest dollar. The National Insurance Scheme provides payable benefits for sickness, materiality, medical care, disablement, death, injury, old age, survivors, invalidity and funerals. Eligibility for these benefits requires qualifying contributions and meeting certain other conditions. The levels of benefits payable depend on the number and value of contributions made on behalf of the employee. The Income Tax, Property Tax and Capital Gains Tax Acts are administered by the Inland Revenue Department. The head of the department if the Commissioner of Inland Revenue. The tax year is the calendar year. Every person receiving income is required to file an income tax return on or before April 30 of the following year. Failure to do so by taxpayers results in a penalty of G$15,000 and 2% of the tax assessed, or 5% of the tax assessed for tax payers who fail to comply with a demand notice. Employers must withhold tax from employees’ compensation under the Pay-As-You-Earn system. Every person who receives income other than employment income must pay tax in four equal installments on or before April 1, July 1, October 1, and December 31 in each income year. Each installment should equal one quarter of the tax on chargeable income for the preceding year. The balance of the tax due, if any, must be paid no later than April 30 of the following year. Income from employment in Guyana is deemed to be income accruing in, or derived from Guyana and is taxable in Guyana, whether or not received in Guyana. Non Residents must file returns for any year for their Guyana-source earned income. To file returns, nonresidents follow the same administrative rules as those for residents described in Section K.
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