Taxes on Corporate Income and Gains
- Corporate Income Tax
- Rates of Corporate Tax
- Capital Gains
- Foreign Tax Relief
- Determination of Taxable Income
- Tax Depreciation (Capital Allowance)
- Export Allowance
- Relief for Losses
Other Significant Taxes
- Miscellaneous Matters
- Foreign – Exchange Controls
- Debt-to-Equity Rules
- Controlled Foreign Companies
- Anti avoidance Legislatio
Treaty Withholding Taxes GUIDE
a) At a Glance
Corporate Income Tax Rate (%)
Capital Gains Tax Rate (%)
Branch Tax Rate (%)
Withholding Tax Rate (%)
– Royalties from Patents, Know-how, etc.
– Management fees
– Branch Remittance Tax
– Non-resident contractors
– Resident contractors
Net Operating Losses (Years):
a) The 27.5% rate applies to non-commercial activities while the 40% rate applies to commercial activities; except for telephone companies for which the 45% rate applies. For details concerning the minimum tax, see section B.
b) This withholding tax is a final tax that applies to dividends paid to non-resident companies and individuals.
c) This tax applies to bank interest and to interest on loans secured by bonds or similar instruments that is paid to resident and non-resident companies and individuals. It also applies to interest on debts, mortgages or other securities that is paid to non-resident companies and individuals. Withholding tax on interest is generally a final tax for non-bank recipients. Aged or incapacitated individuals are exempt from withholding tax on interest.
d) This withholding tax is the final tax that applies to payment to non-resident companies and individuals.
e) This withholding tax serves as a credit against the contractors Income or Corporation Tax liability.
f)See Section C.
B. Taxes on Corporate Income and Gains
Corporate Income Tax Resident companies are subject to tax on their worldwide income. A company is considered resident in Guyana if its control and management are exercised in Guyana. Non-resident companies carrying on a trade or business in Guyana are subject to tax on income derived from Guyana, regardless of where the income is received.
Rates of Corporate Tax The rate of tax for commercial activities is 40% except for telephone companies for which the 45% rate applies; for non-commercial activities, the rate is 27.5%. A commercial activity is “an activity carried out by a company trading in goods not manufactured by it, and includes an activity of a commission agency, a telecommunication company, a banking or insurance other than long term insurance…”
No special tax rates apply to particular industries.
The minimum tax is 2% of turnover. It applies only to commercial companies other than insurance companies. Payments of minimum tax may be carried forward to offset corporate income tax payable in future years, but they may not reduce tax payable in any year to less than 2% of turnover. Where tax at the Corporate Tax Rate is lower than the minimum tax, an application may be made to the Commissioner General for exemption from the minimum tax.
Capital Gains. Capital Gains tax at a rate of 20% is imposed on the net chargeable gains derived from the disposal of capital assets. Gains derived from the disposal of capital assets within 12 months of their acquisition date are treated as ordinary income and are subject to corporate income tax at rates stated above. Gains derived from the disposal of assets held for more than 25 years are exempt from tax.
Capital losses may be carried forward to offset capital gains for a period of 24 years.
Administration. The tax year is the calendar year. Tax is assessed during a tax year on income earned in the year of income, which is generally the calendar year preceding the tax year. The Commissioner General may allow companies with an accounting year other than the calendar year to adopt their accounting year as their income year. For these companies, tax is assessed in a tax year on income earned in the income year ending in the previous tax year.
Advance tax payments are due on March 15, June 15, September 15, December 15, of the calendar year prior to the tax year. Advance payments are normally based on the preceding year’s tax liability. However, the Commissioner may require the company to calculate the payments based on estimated income for the current year.
Tax returns must be filed, and balance of tax due paid, by April 30 of the tax year.
Dividends. Dividends paid by resident companies to other resident companies and to resident individuals are exempt from tax.
A final withholding tax of 20% is imposed on dividends paid to non-resident companies and individuals.
Resident companies and individuals must include dividends received from non-resident companies in taxable income.
Foreign Tax Relief. Foreign tax relief is available under double tax treaties with Canada and the United Kingdom (for withholding rates under these treaties, see Section F).
Guyana may grant unilateral relief for foreign taxes paid in countries with tax systems and legislation similar to those in Guyana. For British Commonwealth countries, the relief is 50% of the relief that would be available if the foreign country were a treaty country.
For other countries, the relief is 25% of such available relief. The available relief is the lower of the tax rate in Guyana and the tax rate in the other country.
C. Determination of Taxable Income
General. Taxable income is the income reported in the company’s financial statements, prepared in accordance with generally accepted accounting principles and subject to certain adjustments.
Profits derived on the disposal of capital assets are not included in taxable income (but see Section B for an exception to this rule).
Income derived from the export of specified products to countries that are not members of the Caribbean Community and Common Market (CARICOM) is subject to an export allowance (see Export Allowance below).
Expenses incurred wholly and exclusively in the production of income are deductible. Deductions for administrative, technical, professional or other managerial services fees paid to a non-resident company or branch may not exceed 1% of annual turnover. Charitable donations are not deductible unless they are made under a deed of covenant.
Inventories. Inventories are valued at the lower of cost and net realizable value. Cost is generally determined using the average cost method for accounting and tax purposes, but the first-in, first out (FIFO) method is also acceptable.
Provisions. Provisions are deductible only if they relate to specific or know liabilities or to doubtful debts.
Tax Depreciation (Capital Allowances). The capital allowances granted in Guyana are described below.
Initial Allowance. Initial allowances are available for industrial buildings and structures at a rate of 10% and for plant and machinery, including mechanical equipment, at a rate of 40% The initial allowances are granted in the year of purchase and reduce the depreciable value of assets.
Annual (Wear and Tear) Allowances. Buildings that house machinery are depreciated at a rate of 5%, using the straight line method. Other assets may be depreciated using the straight line (limited to 90% of cost) or declining balance methods. Click Next below for further information.