Most Frequently Asked Tax Questions in Guyana

Contents

Income Tax

1. Who is required to pay income tax?
2. If a non-resident has income arising in Guyana is income tax payable?
3. Who is an employee?
4. What is remuneration?
5. How are taxes administered in Guyana?
6. What percentage of an individual’s income is taxed?
7. When is the deadline for filing income tax returns?
8. What income is exempt from tax?
9. Are travelling allowances taxable?
10. Is overtime income taxable?
11. Is uniform allowance taxable?
12. Are telephone allowances taxable?
13. Are there any other allowances that are tax-free?
14. Are consultants liable to tax?
15. When is tax assessed?
16. What happens if returns are not filed on time?
17. Are there any penalties for failure to file returns?
18. Is there any relief under double tax treaties?

Corporation Tax

1. What income is chargeable to corporation tax?
2. How is corporation tax calculated?

Income Tax

1. Who is required to pay income tax?
   Any person who has income accruing in or derived from Guyana is subject to income tax whether or not the payment is received in Guyana. Income tax applies to all sources of income identified under section 5 (a)-(e) of the Income Tax Act.

   These sources are:

   • business income;
   • employment income;
   • certain classes of dividends, interest, discounts and annuities;
   • charges or annuities other than an annuity paid out of a superannuation fund; and
   • income arising from property.

   Employment income includes gains or profits from any office or employment including compensation for the termination of any contract of employment or service, the estimated value of any quarters or board or residence or of any allowance granted in respect of employment whether in money or otherwise, other than an allowance for medical or dental expenses, or any passage to or from Guyana.

2. If a non-resident has income arising in Guyana is income tax payable?

As a rule there is no distinction between a resident and a non-resident with respect to tax on income arising in Guyana. Although the period of stay may not extend beyond the stipulated 183 days for resident status tax will be charged at the same rate as if the individual was a resident.

3. Who is an employee?

An employee is any person who receives remuneration and includes an officer, agent or person holding a position of employment.

4. What is remuneration?

Remuneration is defined as "all salaries, wages, overtime, leave pay, sick bonus, stipend, commission other payment of any kind for services, directors’ fees, retiring allowances, compensation for the termination of any contract of employment or service and any perquisites, including the annual value of any residence, quarters, board and lodging whether paid in money or otherwise, arising or accruing in or derived from or received in Guyana which are chargeable under this Act, but shall not include any salary or share of profits arising from a trade, business, profession or vocation carried on by a person either by himself or in partnership with any other person."

5. How are taxes administered in Guyana?

Employed persons are taxed at source on the pay as you earn (PAYE) basis. It is the obligation of the employer to deduct and remit the taxes payable.

Self–employed persons are required to pay advance taxes based on the chargeable income of the preceding year, in quarterly installments on April 1^st, July 1^st, October 1^st and December 31^st. Any balance of taxes after the returns have been lodged is payable on or before April 30^th of the following year of income.

6. What percentage of an individual’s income is taxed?

Individuals are entitled to a tax-free personal allowance of $216,000 per annum apportioned on a pay period basis. Income between $216,000 and $350,000 is taxed at the rate of 20% while income in the excess of $350,000 is taxed at 33.1/3%.

7. When is the deadline for filing income tax returns?

The deadline for filing income tax returns and payment of balance of taxes is April 30^th, following the year of income.

8. What income is exempt from tax?

   1. 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.
   2. Any emoluments payable under any incentive scheme approved by the Minister.
   3. Social Security benefits.
   4. Discharge or severance pay benefits.

9. Are travelling allowances taxable?

Travelling allowances are non-taxable. Generally, a travelling allowance is only justified if it is paid to an employee or officer who has to use his personal car, motor cycle or bicycle or otherwise has to finance the cost of travelling in the performance of his duties. If an employer provides an employee with transportation to assist the employee to get to and from work during hours when public transportation availability or security is a problem this would not be taxable.

10. Are entertainment allowances taxable?

Generally entertainment allowances qualify as tax-free only if they are paid to employees who are required to entertain actual or prospective customers or clients in the normal course of their duties. The level should be set having regard to the employee’s status as well as the persons he is likely to entertain and the frequency.

11. Is overtime income taxable?

Overtime allowance is taxable as a gain from employment.

12. Is uniform allowance taxable?

Employers who require their staff to wear uniforms usually provide material and an allowance for sewing, which is non-taxable. In some cases a laundry allowance is provided as well.

13. Are telephone allowances taxable?

Employees who are required to be on call may be paid a tax-free allowance to reimburse them for the costs of telephone rentals and local calls. The reimbursement of overseas calls made for employment related purposes are also non-taxable.

14. Are there any other allowances that are tax-free?

A company car in place of travelling allowance is non-taxable. Medical or dental expenses and passage to and from Guyana paid for employees and whole time service directors are also tax-free. However non-executive directors are not entitled to these allowances.

15. Are consultants liable to tax?

Consultants operating as individuals or as a partnership are regarded as self-employed. They are required to pay tax on any gains or profits from business derived from or accruing in Guyana. The income is taxable in Guyana whether or not it is received here.

16. When is tax assessed?

The Commissioner is vested with the power to assess every chargeable person as soon as may be after the day prescribed for delivering the returns i.e. April 30^th. Where a return has been delivered he may choose to accept the returns and make an assessment accordingly or refuse to accept the return and determine the chargeable income and tax to the best of his judgement.

17. What happens if returns are not filed on time?

When returns are not filed the Commissioner may raise provisional assessments within eight months after the prescribed date. This assessment will not affect any liability otherwise incurred by that person. If a person fails to deliver a return and the Commissioner is of the opinion that the person should pay tax, the Commissioner may determine the amount of chargeable income of that person and assess him accordingly.

18. Are there any penalties for failure to file returns?
    Where a return has not been filed for the year immediately preceding any year of assessment or where a return is not filed in compliance with a notice served, the Commissioner may:

    1. add to an assessment made on a person failing to make a return on time, a sum equal to two percent of the amount of tax assessed.
    2. add to an assessment made on a person failing to make a return in compliance with a notice served a sum equal to five percent of the tax assessed.

19. Is there any relief under double tax treaties?
    Foreign tax relief is available under double tax treaties with Caricom countries, Canada and the United Kingdom. If a person derives income from a country with which Guyana has concluded a double tax treaty, relief is granted as specified in the agreement.

Corporation Tax

1. What income is chargeable to corporation tax?
   The profit of any company accrued in or derived from Guyana or elsewhere, whether or not payments are received in Guyana is chargeable to corporation tax. Chargeable profits include:
   
   1. profits from any trade or business for whatever period of time the trade or business is carried on;
   2. profits from any profession or vocation or management charges or charges for the provision of personal services and technical or managerial skills;
   3. capital gains accruing on the disposal of property within twelve months of its acquisition;
   4. interests, discounts, annuities or other accrued or periodic payment received for the use of capital;
   5. premiums, commissions and fees;
   6. rents and royalties; and
   7. dividends and other income from non-resident companies.
      
2. How is corporation tax calculated?
   The rate of corporation tax is forty-five percent for commercial companies and thirty-five percent for non-commercial companies. There are no special rates applying to particular industries.

A commercial company is a company at least seventy-five percent of the gross income of which is derived form 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 insurance business other than long-term insurance.

While non-commercial company pays tax at one rate, (35%), commercial companies are also subject to a tax referred to as minimum corporation tax (MCT) which is computed at two percent of turnover. Commercial companies must first calculate corporation tax in accordance with normal principles. If the tax calculated on the normal basis i.e. at 45% is less than two percent of turnover, tax at two percent of turnover is payable. Where the tax at the normal rate is greater, then tax at the normal rate is payable.

Any excess MCT over tax at the normal rate is carried forward for setoff against corporation tax payable in subsequent years. MCT is recoverable against future years’ taxes providing however that in no year shall the tax payable be reduced to less than two percent of turnover.

 

Property tax

1. Who must pay property tax?

Resident individuals, companies and non-residents with net property in Guyana who carry on business in Guyana are liable to property tax. Property includes tangible and intangible property, cash, receivables and other rights.

2. How are property taxes charged?

Property taxes are charged on the value of net property. In computing the net property liabilities are deductible. The rates of property tax are as follows:

Companies

On the first $500,000 of net property Nil

On every dollar of the next $5,000,000 ½%

On every dollar of the remainder ¾%

Individuals

On the first $5,000,000 of net property Nil

On every dollar of the next $5,000,000 ½%

On every dollar of the remainder ¾%

3. When are property taxes due?

Filing of returns and payment of property taxes are due on or before April 30^th, of the year following the year of income.