MAJOR DEVELOPMENTS
In his budget speech presented to the Parliament of the Kingdom of Swaziland in March 1996, the Minister for Finance announced his intention to introduce significant income tax reforms. A new income tax act is currently being drafted, and it is anticipated that its provisions will be enacted to take effect from the income tax year commencing on July 1, 1998.
INCOME TAXES ON CORPORATIONS
1. Rates
Companies, other than mining companies, are subject to a flat rate of 37.5% of taxable income from a source within or deemed to be within Swaziland. For mining companies, the rate is 27% of taxable income up to E20,000 and 37.5% of taxable income in excess of E20,000. Dividends received by a company are exempt from income tax.
2. Local Income Taxes
None.
3. Capital Gains Taxes
There are no capital gains taxes.
4. Branch Profits Taxes
A branch of a foreign company is taxed on the profits derived in Swaziland as though it were a resident company.
5. Foreign Tax Reliefs
As Swaziland income tax is levied only on taxable income derived or deemed to be derived in Swaziland, the question of foreign tax relief does not normally arise. Relief will only be granted if provided for in a tax treaty with a particular foreign country.
INCOME TAXES ON INDIVIDUALS
9. Rates
Income tax is payable at graduated rates, with a maximum rate of 39% which applies to taxable income in excess of E40,000 per annum. Tax rates are as follows:
Taxable Income
Tax on Percentage
Over Not Over Lower Amount on Excess
E13,000 E16,000 E 0 12%
16,000 20,000 360 16
20,000 24,000 1,000 20
24,000 28,000 1,800 24
28,000 32,000 2,760 28
32,000 36,000 3,880 32
36,000 40,000 5,160 36
40,000 6,600 39
All benefits-in-kind must be included in taxable income:
Benefit Addition to Annual Taxable Income
Free housing E360 to E8,590 depending on size and location of house
Free use of a car E5,160 to E15,460 depending on cubic capacity of engine and determined value of the vehicle
Electricity and telephone E764 per service
Other utilities E382 per service
Domestic servants (cooks, maids, etc.) E960 per household servant
Tuition payments 80% of payments
10. Local Income Taxes
None.
11. Capital Gains Taxes
There are no capital gains taxes.
12. Foreign Tax Reliefs
See item 5.
13. Tax Period
The tax year runs from July 1 to June 30.
14. Other Matters
Computation of Taxable Income. Taxable income includes basic wages, commissions, fees, annual value of benefits, bonuses, and dividend income in excess of E2,000 from a Swaziland source (except in the case of nonresidents not carrying on business in Swaziland). Dividend income in excess of E2,000 is taxable at 20% unless received from a company listed with the Swaziland Stock Exchange, in which case it is taxed at 10%. Any gratuity or bonus received by or accrued to an employee under the terms of a written agreement on bona fide termination of employment
is exempt from tax to the extent that it does not exceed 25% of the total of actual salary received for the period of employment provided the period of the contract of employment is not less than two years, or, if the period
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