Corporation tax is charged at a rate of 40% for commercial activity (except telephone companies) and at a rate of 25% in the case of any other activity. Telephone companies pay corporation tax at a rate of 45%.
Commercial activity means an activity carried out by a company trading in goods not manufactured by it, and includes an activity of a commission agency, a telecommunications company, a bank and an insurance company (other than a long-term insurance company). Where companies are engaged in both commercial and non-commercial activities, the commercial activity is taxed at 40% and the non-commercial activity is taxed at 25%.
Where the actual corporation tax liability of a commercial company as computed at 40% or 45% is less than 2% of the turnover of the company, the Corporation Tax Act provides for the payment of corporation tax at the rate of 2% of turnover – referred to as minimum tax. Insurance companies and any company exempt from corporation tax are exempt from minimum tax. Minimum tax paid in excess of the actual corporation tax liability is recoverable once proven to the satisfaction of the Commissioner-General and on the raising of an assessment.
Tax returns must be filed by April 30 of the year following the accounting year-end. Accounting year-ends that do not coincide with the calendar year-end must be approved by the tax authority. Tax returns are required to be submitted with audited financial statements.
Corporate bodies are required to pay corporation tax in quarterly installments on March 15, June 15, September 15, and December 15 of the year of income. Any shortfall of taxes after accounting for quarterly installments should be met by April 30 following the year of income.
The corporation tax rates on branch profit are the same as for companies. Branch profit net of corporation tax is subject to withholding tax at 20%.
Losses may be carried forward indefinitely to be set off against future profits. Brought forward tax losses cannot be used to reduce the tax payable of any year by more than 50%. Loss carrybacks are not permitted.
Payments to Foreign Affiliates
A company may claim a deduction for charges paid to foreign affiliates, provided such amounts are reasonable and necessary, having regard to the requirements of the trade. Deduction for head office expenses is restricted to the lesser of the charge and 1% of gross income of the company. Head office expenses include charges from a non-resident parent company, or a non-resident associate company of a company resident in Guyana, or a non-resident associate or subsidiary company of a non-resident company in respect of a branch or agency owned by the non-resident company in Guyana, or the head office of a non-resident company in respect of a branch or agency in Guyana, for any administrative, technical, professional or other like service of an essentially managerial nature.
There are no group taxation provisions.
Income is taxable when it accrues in or is derived from Guyana, whether or not the individual is resident in Guyana, and whether or not the income is received in Guyana.
Employment compensation includes all benefits and allowances derived from employment, except allowances for medical or dental expenses or for any passage to or from Guyana and allowances for subsistence, travel, vacation (limited to one month’s gross salary), entertainment, or expenses if proven to the satisfaction of the tax authority.
There is a personal allowance equivalent to the higher of G$85,000 per month or one-third of the employee’s salary. Also, the employee’s national insurance contributions are allowed as a deduction in determining taxable income. Premiums paid for life and medical insurance are a deductible expense for individuals, up to a maximum of the lower of 10 percent of their income or G$30,000 per month. The rate of income tax is 28% on taxable income up to G$170,000 per month and 40% on earnings beyond this level.
Self-employed persons make income tax payments in quarterly installments with any shortfall of taxes being made by 30 April following the year of income. Employed persons have income taxes withheld under the pay-as-you-earn (PAYE) system. PAYE returns and payments are due by the fourteenth day of the next month. Income tax returns must be filed by April 30 of the year following the year of income.
National Insurance Scheme
National insurance contributions are required at a rate 14% of earnings, with 5.6% being deducted from employees’ salaries and 8.4% being contributed by employers. Self-employed persons contribute 12.5% of earnings. There is a monthly earnings ceiling of G$280,000. NIS returns and payments are due by the fifteenth day of the next month.
Withholding tax at 20% is deducted at source on gross distributions and other specified payments (e.g. royalties, management fees, rent) made to non-residents.
Payments to non-resident companies on account of any contract undertakings are subject to withholding tax at 10%. These withholding taxes on contracts are a form of advance tax to be set-off against final tax liabilities. Withholding tax returns and payments are due by the fourteenth day of the next month.
Property tax is payable on net property of companies and individuals at the end of year of income. The first G$40 million of net property is exempt, the next G$20 million is taxed at 0.5% and thereafter a rate of 0.75% applies.
Capital Gains Tax
Gains arising from disposal of capital assets held for between 1 and 25 years are subject to capital gains tax at a rate of 20%. Capital assets held for more than 25 years are not subject to capital gains tax upon subsequent disposal. Gains arising upon the disposal of capital assets within 12 months of acquisition are subject to corporation or income tax as appropriate. Capital losses are allowed as an offset to capital gains and may be carried forward for a period of 24 years.
Stamp duties are charged on various types of instruments, except retail transactions. The rate applicable varies by type of instrument.
Customs duty is charged on the importation of goods into Guyana. The rate applicable varies by type of good.
Excise tax is charged on the importation or domestic manufacture of motor vehicles, petroleum products, tobacco products and alcoholic beverages.
Value-added Tax at a rate of 14% is charged on taxable supplies of goods and services. There are certain categories of supplies which are zero-rated or exempt. VAT returns and payments are due by the twenty-first day of the next month.
Corporation Tax Holiday
Under the Income Tax (In Aid of Industry) Act, the Minister of Finance may grant an exemption from corporation tax with respect to new economic activity of a developmental and risk-bearing nature in one of the following fields:
- Non-Traditional Agriculture Development and Agro-Processing
- Information and Communications Technology
- Petroleum Exploration, Extraction, or Refining
- Mineral Exploration, Extraction or Refining
- Tourist Facilities
- Value-Added Wood Processing
- Textile Production
- Development and Manufacturing of New Pharmaceutical Products, Chemical Compounds and the Processing of Raw Materials to Produce Injectables
- Infrastructural Development, including the Production of Electricity using Renewable Sources of Energy
New economic activity in one of the following administrative regions of Guyana may also qualify for exemption from corporation tax:
Region 1: Barima / Waini
Region 7: Cuyuni / Mazaruni
Region 8: Potaro / Siparuni
Region 9: Upper Takatu / Upper Essequibo
Region 10: Upper Demerara / Upper Berbice
Exemption is granted for a period of up to 5 years but may be extended up to 10 years if the activity is in one of the specified economic fields. In the case of infrastructural development, the exemption may extend beyond 10 years.
In addition to the above provisions, the Minister may grant an exemption from corporation tax with respect to income from the following activities:
- Wind and Solar Energy
- Water Treatment and Water Recycling Facilities
- Waste Disposal and Recycling Facilities for Plastic Items
Exemption for corporation tax for these activities shall be for a period not exceeding 2 years.
A tax credit equalling 75% of income and corporate taxes on profits can be granted on the provision of tourism activities in regions 1, 7, 8, 9 and 10.
Companies that export sales of manufactured, processed or agricultural products are entitled to export allowances as a deduction from chargeable profits. The quantum of the allowance is dependent on the percentage of export sales to total sales. Products that do not qualify for this allowance are bauxite, gold, diamonds, petroleum, sugar, rum, molasses, rice, timber, lumber, and shrimp.
Double Tax Treaties
Guyana has effective double taxation treaties with Canada, the United Kingdom and CARICOM Member States that have ratified the CARICOM Double Tax Treaty.