CORPORATE TAXES SIGNIFICANT DEVELOPMENTS
Tax holidays have been reinstituted for certain developmental or risk-bearing enterprises.
TAXES ON CORPORATE INCOME
For the year of assessment 1999(the accounting year ended during 1998) corporation tax is to be paid at a rate of 45% of chargeable income of a
commercial company and at the rate of 35% in the case of any other company (but see “Minimum tax” below).
A commercial company means a company at least 75% of the gross income of which is derived from trading in goods not manufactured by it and includes any commission agency; any telecommunications company; any corporate body licensed or otherwise authorized by law to carry on banking business in Guyana; and any company carrying on a Guyana insurance usiness, other than long-term insurance business, as defined in section 2 of the insurance Act.
Petroleum and mining companies may, by Ministerial Order affirmed by the National Assembly, have all provisions of the income Tax and Corporation Tax Acts waived, modified, adopted, or qualified as may be specified as may be specified in the Order.
Minimum tax on corporate income/Where the actual orporation tax liability of a commercial company as computed at 45% of chargeable income is less than 2% of the turnover of the ompany in the year of income immediately preceding the year of assessment applicable, the Corporation
Tax Act provides for the payment of corporation tax (referred to as minimum tax) at the rate of 2% of turnover.
Certain exemptions from minimum tax are provided.
1. Commercial companies with a turnover of less than G$1,200,000.
2. Companies carrying on insurance business.
3. Companies exempt from corporation tax.
4. Noncommercial companies.
Minimum tax paid in excess of the actual corporation tax liability is to be carried forward for setoff against the corporation tax liability for the succeeding year or years to the extent this liability is in excess of the 2% of turnover minimum tax for the relevant year.
CORPORATE RESIDENCE
Corporate residence is determined by reference to location of central management and control of the business of a company, whether or not the company is incorporated in Guyana.
OTHER TAXES
Property tax/Property tax is payable on net property values of a company with assets acquired prior to January 1, 1999 included at the market values at January 1,1999.As of January 1 ,1999,, the first G$1,500,000 of net property exempt; a rate of 0.5% applies on the next G$5 million and a rate of 0.75% thereafter.
Other/Other revenue is raised in the form of a consumption tax on locally manufactured goods that are not exported, customs duties, purchase tax and consumption tax on importation of goods, local rates on property, and a wide range of stamp taxes. A 1994 revision of the duties and taxes payable on importation of materials and equipment has reduced or zero-rated consumption tax on a number of imported materials and equipment items.
BRANCH INCOME
Tax rates on branch income are the same as on corporate income. Branch income is subject to withholding tax regardless of whether the income is remitted to the head office, with the proviso that branch income that is reinvested in Guyana to the satisfaction of the Commissioner will not be liable to withholding tax. The provision for withholding tax on branch
income is amended by double taxation agreements with Canada, the United Kingdom and certain CARICOM territories.
INCOME DETERMINATION
Inventory valuation/Inventories are generally stated at the lower of cost or net realizable value. FIFO or average-cost methods are generally used for book and tax purposes. However, the Inland Revenue will normally accept a method of valuation that conforms with standard accounting practice in the trade. Book and tax conformity of inventory valuation is generally required.
Capital gains/Short-term gains, which are gains arising upon the disposal of capital assets within 12 months of acquisition, are subject to tax at corporate rates.
Long-term gains, which are gains arising upon disposal of capital assets between 1 and 25 years after acquisition, are subject to capital gains tax at a rate of 20% to the extent they exceedG$1,000.capital assets held for m
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