international tax summaries——WESTERN SAMOA（1998）
international tax summaries——WESTERN SAMOA（1998）
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Effective July 1, 1995, the individual income tax rate was reduced see item 9;Effective January 1, 1994, rebates based on the number of dependents were abolished.
INCOME TAXES ON CORPORATIONS
Companies are taxable annually on their worldwide taxable income, including the balancing charge arising from the sale of business assets and intercorporate dividends. No distinction is made between private or public companies for income tax purposes.
Taxpayer Tax Base Rate
Resident Worldwide taxable income 35.0%
Nonresident Western Samoan-source taxable income 35.0
Resident Non-Western Samoan-source
reinsurance income 2.5
Life insurance fund investment income 10.0
Nonresident Life insurance premiums income 7.5
General insurance premiums income 15.0
Reinsurance premiums income 7.5
Shipping companies Gross income 5.0
Nonresident film rental companies Gross income 15.0
No speCIAl provisions exist for extractive industries.
Deductions from taxable income are allowed for all reasonable expenses incurred in gaining or producing income and for accumulated losses.
Certain income is exempted from taxation by investment incentives. Also tax exempt is income derived by the producer of primary production from the sale and disposal of primary production. This income has been exempted since the tax year beginning January 1, 1975. Primary production includes farming, handicrafts, and fishing. Clergy income from donations have been exempt since January 1, 1988. Other exempt income includes National Provident Fund income and income derived from nonresident government securities, sports assoCIAtions, charitable organizations, and others.
7. Payment of Taxes
Income tax is assessed on the preceding year's income. Companies pay an estimated provision tax based on that assessment.
INCOME TAXES ON INDIVIDUALS
A wage tax applies to the worldwide income of individuals resident in Western Samoa. Benefits-in-kind are included in income. Effective July 1, 1995, the tax rates for individuals are:
Annual Taxable Income
Over Not Over Tax Rate
WS$ 0 WS$ 6,000 Nil
6,000 12,000 10%
12,000 18,000 20
Effective January 1, 1994, rebates based on number of dependents are not available.
Taxable income is gross income less deductions permitted by law. Deductions include reasonable business expenditures incurred to earn business income, but business losses are not deductible from wage income. Income derived from primary production is exempt from tax. The tax on wages and salaries is withheld at source under the pay-as-you-earn (PAYE) scheme. Taxes are paid in installments during the year in which the income is earned. Except under speCIAl circumstances, PAYE tax is the final tax, with no refunds.
Dividend and other payments made by companies are subject to withholding tax at source, which is a final tax (see item 17). Dividends received from enterprises granted an income tax holiday are exempt from tax.
14. Other Matters
Partnerships. Partnerships are not subject to tax as a separate entity; the tax assessments are issued on each of the partners.
Trustees. Trustees are taxable at the flat rate of 50%.
INCOME TAXES ON NONRESIDENTS
15. Liability to Tax
Nonresident companies having assets or business in Western Samoa and nonresident individuals are taxable only on income from sources within Western Samoa. See item 1 for the tax rates applicable to companies and item 9 for the rates applicable to individuals.
17. Withholding Tax Rates
Companies are required to withhold tax on dividends and other payments made to resident and nonresident shareholders.
Payment Withholding Rate
Director's fees 30
The withholding taxes on interest and dividend payments is a final tax. Interest received by residents from sources outside of Western Samoa is subject to normal rates of tax (see item 9).
OTHER SIGNIFICANT TAXES
21. Sales (Value-Added) Taxes
There are no general sales taxes in Western Samoa. Selective excise taxes are imposed on a wide range of locally produced goods and imports. The rates vary according to the product; some of the major rates are:
Tobacco products 130%
Soft drinks 20
Gems and precious metals 45
Motor vehicles (maximum) 70
Exports are exempt from the excise taxes.
Value-Added Goods and Services Tax. Effective January 1, 1994, the Value-Added Goods and Services Tax Act 1992/93 imposes a VAGST or value-added goods and services tax. The VAGST is a domestic input credit consumption tax. The rate is 10% for all goods and services except for exports, which are taxed at 0%. VAGST will be imposed on the supply of goods and services in Western Samoa by a registered business
in the course of furthering its taxable activity. VAGST is not charged on salaries, wages, or finanCIAl services.
Goods and Services Tax. Effective July 1991, a 10% goods and services tax applies to providers of certain professional services, such as accounting, architecture, engineering consulting, dentistry, insurance (except the provision of personal life insurance or superannuation), legal, medical and certain pharmaceutical, surveying, valuation. The 10% consumer charge also is imposed on the provision of any service, including accommodations, meals or beverages, rental
services, admissions to movie theaters or sporting or entertainment events, and lotteries and bingo. Funds raised for charitable, religious, or educational purposes are exempted from this tax.
22. Inheritance and Gift Taxes
Effective January 1, 1987, there are no death or gift taxes.
23. Taxes on Payrolls (SoCIAl Security)
Effective 1972, soCIAl security contributions fund the National
Provident Fund (NPF), an autonomous body under the Ministry of Finance. Contributions are payable by both employees and employers at the rate of 5% of monthly wages, including overtime pay, allowances, bonuses,
etc. No contribution is payable by an employee or the employer on wages of less than WS$20 per month. The employer is required to withhold employee and employer contributions and submit the withholding to the NPF within seven days of paying wages. Individuals under the age of 15, nonresidents, and other persons determined by the Minister of Finance are exempted from soCIAl security contributions.
Accident Compensation. Two schemes provide rehabilitation and
compensation assistance to injured individuals. In the event of death, benefits go to the deceased's dependents. One provides for compensation to workers injured on the job, the other to victims of motor vehicle accidents.
Employer's contribution to worker's compensation 1% of wages
Motor vehicle accidents tax of 5 sene per gallon of
imported motor fuel
25. Other Taxes
Business Use and Activity Licenses. Taxes on the use of goods or property or permission to perform activities are charged annually through licenses issued by the Department of Inland Revenue. Businesses may take out multiple licenses to cover the various aspects of trading; the charges are WS$200 a year or WS$4 for a speCIAl daily license.
Passenger Charge. All international travelers departing from the Western Samoan airport are liable to a charge of WS$20. Aircraft crew, children under the age of two, and transit passengers are exempted from the charge.
Import Duties. Import duties are imposed on cost, insurance, and freight of certain items at ad valorem rates. The predominant rate throughout the tariff is 35%. Examples of different rates are:
Certain raw materials, building materials, equipment 20%
Certain agricultural supplies and equipment 5?0
Imported food 5?0
Certain chemical and allied products 50
Wood and wood products, certain paper products 60
Certain apparel and footwear 60
Televisions, certain radios 50
Certain vehicles 50
Certain items are exempted. Full exemption applies to approved
materials for educational, cultural, or religious purposes; materials for socioeconomic development received under grants from the United Nations of foreign governments by Western Samoan organizations for relief; supplies for diplomatic or consular services; and passenger baggage, within limits. Full or partial exemptions may apply according to the Enterprise Incentives (Amendment) acts (see item 34).
In addition to the import duty, an excise tax is payable, with the highest effective rate of 155%.
Export Duties. The following exported items are taxed on an ad valorem basis when the F.O.B. price exceeds a certain minimum.
Copra meal 3%
Coconut oil WS$25 per metric ton
Veneer and sawn logs 20%
Rough timber (depending on thickness) 5%?5%
Stamp Duties. Stamp duties are levied on selected documents at various rates, for example, WS$0.50 for Articles of AssoCIAtion, WS$1.25 for lease documents, 0.3% on the annual rental value of mortgages, and 0.5%-1% on the value of transferred shares. Property Taxes. There are no taxes on real property.
COMPUTATION OF TAXABLE INCOME
26. Capital Gains
Capital gains are taxed at the rate of 30%.
27. DepreCIAtion and Depletion
Depreciation allowances are granted for reasonable wear and tear of plant, machinery, equipment, and vehicles as prescribed by the Commissioner of Inland Revenue. Most plant and machinery is depreciated at 20% of the written-down value. Commercial buildings erected or first used after December 31, 1989, can be depreciated at the rate of 20%, other buildings at the rate of 1.5%. Special depreCIAtion allowances may be granted by the Minister of Finance for purposes of encouraging economic development.
29. Loss Carryovers
Losses can be carried forward indefinitely.
34. Incentives and Grants
Special depreCIAtion allowances may be granted by the Minister of Finance for purposes of encouraging economic development. Exemptions from import duties, full or partial, may apply to materials, equipment, and plant required for the establishment or expansion of enterprises approved under the Enterprise Incentives (Amendment) acts of 1984 and 1986.
35. Exchange Controls
Every sale of foreign currency by a commerCIAl bank is subject to a foreign exchange levy at the rate of 1% of the tala value of the foreign currency. There are no exemptions or deductions.