SudanTax Obligations Detailed

In Sudan, employers face various tax obligations related to corporate taxes, VAT, payroll taxes, and social security contributions.

Corporate Taxes

Corporate tax rates in Sudan vary based on business activity:

• 0%: Agricultural activities
• 10%: Industrial activities
• 15%: Commercial and service activities, real estate rental, banks, insurance, and fund management
• 30%: Cigarette and tobacco companies
• 35%: Oil and gas exploration, extraction, distribution, and related subcontractors

The tax year is the calendar year, but companies can adopt a different year-end with approval. Annual returns are due within 3.5 months of the accounting year-end, accompanied by audited financial statements and tax payment. Consolidated returns are not permitted.

A 7% withholding tax applies to payments to non-resident subcontractors for interest and other services. A 5% withholding tax applies to payments to registered branches of foreign companies. A 10% tax is levied on rental payments exceeding SDG 3,000. As of December 2nd, 2024, a 4% advance payment of business profit tax is levied on imported goods. Also, a 30% tax on rental income has been introduced, applicable to businesses solely operating within the real estate sector, after allowable deductions.

Value Added Tax (VAT)

The standard VAT rate is 15%, with a 30% rate for telecommunication services. Some activities are exempt. Registration is compulsory for all companies. Returns and payments are due by the 15th of the following month.

Payroll Taxes

Employers withhold and pay salary tax monthly. The individual income tax rates are progressive, ranging from 0% to 20%. The tax year for individuals is the calendar year, and individual tax returns are due by April 1st of the following year.

Social Security Contributions

Employers contribute 17% of an employee's monthly salary to social security. Employees contribute 8% of their monthly salary.

Other Taxes

• Capital Duty: None.
• Real Property Tax: Rates vary by locality.

Withholding Tax

Recent changes effective December 2nd, 2024 include: a withholding tax on ancillary services to rent; revised withholding tax rates on government contract payments; and a 10% withholding tax on mobile money commissions paid to dealers.

This information is current as of February 5, 2025, and may be subject to change. Always verify with official sources or consult a tax professional for the most up-to-date information.

In Sudan, employee tax deductions are administered in accordance with the Personal Income Tax (PIT) law, overseen by the South Sudan Revenue Authority (SSRA).

Personal Income Tax (PIT)

The PIT is a progressive tax, meaning higher earners pay a larger percentage of their income in tax. Specific income brackets and rates are outlined by the SSRA, typically adjusted annually within the Financial Act. These rates are applied after considering allowable deductions and exemptions.

Deductions and Exemptions

• Pension/Social Security: A deduction of 8% of gross income is typically made as a contribution to the National Social Insurance Fund (NSIF).
• Personal Relief: A personal relief amount, reviewed periodically, may be deducted from the taxable income.
• Other Allowances: Specific allowances and deductions might exist for certain situations, such as housing, transportation, or family circumstances. Check the latest Financial Act and regulations provided by the SSRA for the most up-to-date details.
• Exemptions: Specific exemptions can apply to certain income categories, such as income earned by diplomats, foreign representatives of international organizations, and income below a certain threshold. Further exemptions might exist for specific circumstances as outlined in the Taxation Act and relevant regulations.

Employer Responsibilities

Employers are responsible for withholding the correct amount of PIT from employee salaries and remitting it to the SSRA by the due date. Penalties may apply for late or incorrect filings. The SSRA also mandates that employers provide employees with payslips detailing all earnings and deductions.

Tax Year and Filing

The tax year typically aligns with the calendar year. Employers are usually required to file annual returns summarizing employee income and tax withheld. Employees might also need to file individual tax returns depending on their income sources and specific circumstances. Always verify current regulations and requirements with the SSRA.

Additional Considerations

• Financial Act Updates: Tax laws and regulations, including PIT rates, deductions, and exemptions, are often reviewed and amended annually through the Financial Act. It's crucial to consult the latest Financial Act and related SSRA guidance for the most current information.
• SSRA Resources: The SSRA website provides further details on tax regulations, procedures, and necessary forms. Consulting their resources ensures accurate compliance.
• Professional Advice: Consulting a tax professional or the SSRA directly can offer personalized guidance specific to your situation and ensure compliance with current regulations.

It is important to note that this information is current as of February 5, 2025, and might be subject to change due to updates in tax regulations. Direct consultation with the SSRA is recommended for complete accuracy.

Value Added Tax (VAT) in Sudan is levied on most goods and services supplied within the country, as well as on imported goods and services.

VAT Rates

• Standard Rate: 17% applies to most goods and services.
• Telecommunications & Cigarettes: 30% applies to sales by telecommunication companies and cigarette sales.

VAT Registration Threshold

• Mandatory Registration: Businesses with an annual taxable turnover exceeding SDG 100,000 must register for VAT.
• Voluntary Registration: Businesses below the mandatory threshold can register voluntarily if they meet other requirements. This can be advantageous for businesses with significant input tax to reclaim.

VAT Filing and Payment

• Deadline: VAT returns and payments are due by the 15th day of the month following the reporting period.
• As of December 2nd, 2024, the Financial Act 2024/2025 introduced a 4% advance payment of Business Profit Tax (BPT) on imported goods. A 30% tax on rental income was introduced for businesses solely operating in real estate.

Exempt Goods and Services

While comprehensive lists are maintained by the Sudanese tax authorities, some examples of exempt goods and services may include basic foodstuffs like bread and milk and certain essential services. It is always best to check the latest regulations for an up-to-date list of exemptions.

Sales Tax in South Sudan (Important Note)

It is important to note that South Sudan, which gained independence from Sudan in 2011, has its own separate tax system. South Sudan utilizes a sales tax system, not VAT. The standard rate in South Sudan is 18% but with a 20% rate on imported goods and hotel, restaurant, and bar services as of the 2023/2024 fiscal year. The information presented above pertains to Sudan and not South Sudan. Please refer to the appropriate South Sudan resources for their tax regulations. Be aware that this information is current as of today's date, February 5, 2025, and may be subject to change. Always consult with a tax professional for specific guidance.

As of today, February 5, 2025, tax incentives in Sudan (and specifically South Sudan, as information primarily pertains to this region) are available, though details are limited and often granted on a case-by-case basis. Information on Sudan is scarce and outdated, while more recent details are available for South Sudan.

Tax Incentives in South Sudan

Several sources point to a system of incentives in South Sudan, although precise details and application procedures remain somewhat unclear. The available information suggests the following:

• General Investment Incentives: South Sudan offers incentives to attract foreign investment, particularly in designated priority sectors. These incentives can include:

  • Concessions on machinery and equipment
  • Capital allowances
  • Deductible annual allowances
  • Depreciation allowances
  • Access to land for investment

• Sector-Specific Incentives: While specific details are lacking, several sectors are mentioned as investment priorities. Incentives, including duty exemptions, are mentioned for:

  • Agriculture and Agribusiness
  • Physical and Social Infrastructure
  • Mining, Quarrying, Energy, and Electricity
  • Petroleum and Gas Industries
  • Prospecting of Natural Resources
  • Forestry
  • Manufacturing
  • Transport, Telecommunications, Media, and ICT
  • Financial Institutions

• Tax Exemptions: Specific tax exemptions are also available, including:

  • Exemption from business profits tax for up to five years for qualifying investment projects (Sudan)
  • Exemption from Value Added Tax (VAT) on capital equipment for investment projects (Sudan)
  • Duty exemptions on agricultural imports, tools, equipment, machinery, tractors, pharmaceuticals, animal feeds, and seeds. (duration determined by law)

• Tax Credits: A foreign tax credit is available for resident taxpayers earning income from business activities outside South Sudan through a permanent establishment, subject to reciprocal treatment by the foreign jurisdiction. The credit is limited to the lower of the foreign tax paid or the South Sudan tax on the foreign-source income.

Application Procedures

The process for obtaining tax incentives in South Sudan is not clearly defined in the provided information. It is advised to contact the South Sudan Revenue Authority and/or the Ministry of Investment for specific details and application procedures.

Additional Tax Information (South Sudan)

• Business Profit Tax (BPT): The standard BPT rates are 10% for small businesses and 15% for medium-sized businesses. A 4% advance BPT payment is applicable on imported goods. A 30% tax is levied on rental income for businesses exclusively in real estate, after allowable deductions.
• Personal Income Tax: A progressive rate structure exists, ranging from 0% to 15%. Income below a certain threshold (SSP 5,000 monthly) is exempt. A personal relief of SSP 3,600 per year is available on employment income. Up to 8% of gross wages contributed to approved pension schemes is deductible.
• Withholding Tax: Dividends, interest, and royalties are subject to a 10% withholding tax. Withholding tax on government contract payments is 15% for residents and 20% for non-residents. A 10% withholding tax applies to mobile money commissions paid to dealers.
• Excise Tax: Excise taxes are levied on various goods and services, with rates varying by product.
• Customs Duties: Exemptions are available for specific imports related to priority sectors.

This information is current as of February 5, 2025, and may be subject to change. Consulting official government resources for the most up-to-date details is recommended.