GuyanaTax Obligations Detailed

In Guyana, employers face various tax obligations, including income tax, national insurance contributions, and corporate taxes.

Income Tax (PAYE)

• Rates: As of January 1, 2025, the income tax rates are 25% on taxable income up to GYD 260,000 per month and 35% on earnings exceeding this threshold.
• Deductions: A personal allowance, equivalent to either GYD 130,000 per month or one-third of the employee's salary (whichever is higher), is deductible. National insurance contributions and life/medical insurance premiums (up to the lower of 10% of income or GYD 30,000 per month) are also deductible.
• PAYE System: Employers withhold income tax under the Pay-As-You-Earn (PAYE) system.
• Returns and Payments: PAYE returns and payments are due by the 14th of the following month. Annual income tax returns must be filed by April 30th of the following year.

National Insurance Scheme (NIS)

• Rates: Employers contribute 8.4% of insurable earnings, while employees contribute 5.6%. The insurable earnings ceiling is GYD 280,000 per month.
• Payment: NIS contributions are due by the 15th of the following month.

Corporate Tax

• Rates: The corporate tax rate is generally 40% of chargeable profits for commercial companies, and 25% for non-commercial companies, but may vary depending on the nature of the business
• Payments: Corporate taxes are payable in quarterly installments on March 15th, June 15th, September 15th, and December 15th of the income year. Any remaining balance is due by April 30th of the following year.
• Returns: Corporate tax returns, along with audited financial statements, must be filed by April 30th following the accounting year-end.

Other Taxes

• Capital Gains Tax: A 20% tax applies to net chargeable gains.
• Property Tax: Rates are tiered, starting at 0% for the first GYD 40,000,000, then 0.50% on the next GYD 20,000,000, and 0.75% on the remaining amount.
• Withholding Tax: A 20% rate applies to specific income sources, including dividends, interest, royalties and management fees.

This information is current as of February 5, 2025, and may be subject to change. It's recommended to consult with a tax advisor for the latest regulations and personalized guidance.

In Guyana, employee tax deductions, referred to as Pay As You Earn (PAYE), are calculated based on an employee's gross income and several deductions and allowances.

Tax Threshold and Rates

• Tax Threshold: The monthly income tax threshold is GYD 130,000, meaning earnings up to this amount are not taxed. Annually, this equates to a tax-free income of GYD 1,560,000.
• Tax Bands and Rates: A tiered system is in effect as of January 1, 2025:
  • First Band: Up to GYD 260,000 monthly (GYD 3,120,000 annually) is taxed at 25%.
  • Second Band: Income exceeding GYD 260,000 monthly (GYD 3,120,000 annually) is taxed at 35%.

Allowances and Deductions

• Personal Allowance: An annual personal allowance of GYD 1,200,000 applies. This is factored in when determining taxable income. Taxpayers can claim the higher of the GYD 1,560,000 threshold or 1/3 of their chargeable income.
• Overtime and Second Job Relief: The first GYD 50,000 earned monthly from overtime or a second job is tax-exempt.
• Child Deduction: A monthly deduction of GYD 10,000 per child is available. Only one parent can claim this deduction for each child.
• No employment expense deductions are available against employment income.

National Insurance Scheme (NIS)

• Employee and Employer Contributions: Both employees and employers contribute to the NIS. Specific rates apply based on earnings.
• Earnings Ceiling: Contributions are payable up to a specified monthly and weekly earning limit.

PAYE Procedures and Deadlines

• Employers' Responsibility: Employers are responsible for deducting PAYE from employees' salaries and remitting it to the Guyana Revenue Authority (GRA).
• Remittance Deadline: Taxes withheld must be remitted by the 14th of the month following the payment of the employment income.
• Annual Tax Returns: Employees must file their annual tax returns by April 30th of the following year.

Example

Here’s an simplified example assuming monthly values. This scenario does not represent all possible individual cases and may not include other deductible expenses.

Scenario: An employee earns a monthly salary of GYD 300,000, works overtime earning an additional GYD 60,000 and has one child.

Calculation:

1. Gross Income: GYD 300,000 (salary) + GYD 60,000 (overtime) = GYD 360,000

2. Overtime Relief: The first GYD 50,000 of overtime is tax-free, so GYD 10,000 is taxable overtime.

3. Taxable Income: GYD 300,000 (salary) + GYD 10,000 (taxable overtime) - GYD 10,000 (child deduction) = GYD 300,000

4. Tax Calculation: In this scenario and for the purpose of demonstrating tax bands, let’s assume that 1/3 of chargeable income is higher than GYD 130,000 threshold. Hence, the initial GYD 100,000 will be tax-free based on the 1/3 of chargeable income, and the remaining amount (GYD 200,000) is subject to taxes. The first GYD 260,000 would be subjected to the 25% tax rate, but in our scenario GYD 200,000 falls within this tax bracket. Therefore, GYD 200,000 x 25% = GYD 50,000 (tax payable for this band).

This information is current as of February 5, 2025, and is subject to change. Always consult with a tax professional for personalized advice.

In Guyana, the Value Added Tax (VAT) is levied at a standard rate of 14% on most goods and services.

VAT Rates

• Standard Rate: 14% on taxable goods and services.
• Zero-Rated: 0% on exports, certain medical supplies, and other specified goods and services.
• Exempt: Certain goods and services are entirely exempt from VAT, including locally mined raw gold and diamonds, educational services, residential rent, and specific financial and medical services. Additionally, certain food items, consumer products, and equipment for renewable energy are exempt.

VAT Registration

Businesses whose annual taxable turnover equals or exceeds GYD 15,000,000 (approximately USD 72,500) must register for VAT. Voluntary registration is possible for businesses below this threshold if specific criteria are met.

VAT Filing and Payment

Registered businesses are required to file VAT returns and remit payments by the 21st day of the month following the reporting period. Returns can be filed electronically through eServices, using fillable forms, or manually at designated Guyana Revenue Authority (GRA) offices.

Exempt Goods and Services

As of February 5, 2025, a range of goods and services are exempt from VAT in Guyana, encompassing essential items and specific sectors. Here are some examples:

• Basic Food Items: Many uncooked food items, including fresh, chilled, and frozen meats, fish, and poultry.
• Medical Supplies and Services: Specific medical, dental, optical, and paramedical services.
• Educational Services: Private educational services.
• Renewable Energy Equipment: Machinery and equipment used for generating electricity from renewable sources.
• Certain Consumer Products: Diapers, sanitary napkins, toilet tissue, soap, matches, and mosquito nets.
• Other Exemptions: This is not an exhaustive list and other specific exemptions exist for certain vehicles, sports equipment, and items used in various industries such as fishing and agriculture. For the most current and comprehensive list, consult official GRA resources.

Recent Changes and Proposals

Guyana's 2025 budget proposed the removal of VAT on agricultural machinery and backup electricity generators. These proposals are expected to impact businesses operating in those sectors. Furthermore, the reduced personal income tax rates and increased income tax threshold also took effect on January 1, 2025. It's important to consult the most up-to-date official resources for the current status of these proposals.

Guyana offers a range of tax incentives designed to stimulate economic growth and attract investment. As of February 5, 2025, these incentives span various sectors, from manufacturing and agriculture to renewable energy and information technology.

Corporate Tax Incentives

• Customs Duty and VAT Exemptions: Many plant, machinery, equipment, raw materials, and packaging materials used in production are exempt from customs duties and Value Added Tax (VAT). This applies to both manufacturers and small businesses.
• Loss Carryover: Businesses can carry over losses from previous years indefinitely to offset against future profits, reducing their overall tax burden.
• Accelerated Depreciation: Businesses can depreciate plant and equipment at an accelerated rate, allowing them to deduct a larger portion of the asset's cost in the early years of its use and thus reduce their taxable income.
• Repatriation of Profits: There are no restrictions on repatriating capital, profits, and dividends earned in Guyana, making it attractive for foreign investors.
• Research and Development Deductions: Expenses incurred on scientific research related to the business are tax deductible.
• Tax Holidays: "Pioneering" companies engaging in activities considered developmental and risk-bearing may qualify for tax holidays for up to ten years, potentially extending beyond ten years under exceptional circumstances. These activities must contribute to the development of Guyana's resources and benefit the country. However, gold, diamond mining, and petroleum operations are excluded.

Special Investment Zones

The government is planning to establish special investment zones nationwide with potential tax-free incentives, beginning in 2025, aimed at boosting both local and foreign investment and further growing the economy. These zones will have tailored regulations to suit the specific characteristics of each area, with a focus on stimulating growth. Some of the proposed zones include regions like Lethem, Linden, Regions Two and Six, as well as the Enmore and Wales Development Zones.

Personal Income Tax

• Tax Threshold: The income tax threshold has been increased to GYD $130,000 monthly, exempting lower-income earners from paying income tax.
• Reduced Income Tax Rate: The personal income tax rate has been lowered to 25% for income above the threshold.
• Overtime and Second Job Tax Exemption: The first GYD $50,000 of monthly income from overtime work or a second job is tax-free.

Other Incentives

• Renewable Energy: Several incentives support the renewable energy sector, including customs duty and VAT exemptions on equipment like solar panels, wind turbines, and energy-efficient lighting. A two-year corporation tax holiday is available for importers of wind and solar energy equipment. Additionally, self-generation of renewable energy is permitted, and a grid feed-in mechanism is being developed to enable individuals and businesses to sell excess renewable energy back to the national grid.

• Education-Related Tax Incentives: The government has introduced several initiatives for current and future students, including increasing the "Because We Care" Student Grant, offering uniform vouchers and implementing tax deductions up to 10,000 GYD per month per child for one parent.

• University of Guyana Tuition: Tuition fees have been removed for students enrolled at the University of Guyana starting from January 2025.

It's important to consult official government resources and tax advisors for the latest, most comprehensive, and personalized information. Tax laws and regulations can be complex and subject to change. While this information is believed to be current as of February 5, 2025, specific details may evolve.